Wage Stimulus – Understanding the JobKeeker Payment
Eligible employers will be paid $1,500 per fortnight per eligible employee. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.
Where employers participate in the scheme, their employees will receive this payment as follows.
- If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace The Job Keeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).
- If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before
- If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before
- If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re- engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before
It will be up to the employer if they want to pay superannuation on any additional wage paid because of the Job Keeper Payment.
Payments will be made to the employer monthly in arrears by the ATO.
The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May. Businesses will be able to register their interest in participating in the Payment from 30 March 2020 on the ATO website.
Employers (including non- for-profits) will be eligible for the subsidy if:
- their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
- their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and the business is not subject to the Major Bank Levy
Scenario 1 – Self Employed
Melissa is a sole trader running a florist. She does not have employees. Melissa’s business has been in operation for several years. The economic downturn due to the Coronavirus has adversely affected Melissa’s business, and she expects that her business turnover will fall by more than 30 per cent compared to a typical month in 2019.
Melissa will be able to apply for the Job Keeper Payment and would receive 51,500 per fortnight before tax, paid on a monthly basis.
Scenario 2 – Workers with Multiple Jobs
Michelle currently works two permanent part-time jobs, at an art gallery during weekdays, and at the local cafe on the weekend. Due to the impact of the Coronavirus, the gallery has closed and Michelle has been stood down without pay under the Fair Work Act. Michelle continues to work at the café delivering take- away orders.
Michelle can only receive the Job Keeper Payment once, from the employer from whom she nominates as her primary employer. As Michelle only claims the tax free threshold from her job at the art gallery, this will be treated as her nomination of the art gallery as her primary employer.
The art gallery is eligible for the Job Keeper Payment. The art gallery will pass the Job Keeper Payment on to Michelle, so she will receive 51,500 per fortnight before tax. During the application process, the art gallery will notify the ATO that Michelle receives the payment from them. The art gallery is also required to advise Michelle that she has been nominated to the ATO as an eligible employee to receive the payment.
The café is not eligible to receive the Job Keeper Payment for Michelle.
Scenario 3 – Employees made redundant after 1 March 2020
Miles worked as a permanent part-time personal trainer at a gym for six months and was made redundant on 20 March 2020 in response to the Government directive that gyms close. Miles was not entitled to redundancy pay due to his length of service.
In response to the announcement of the Job Keeper Payment, the gym decides they want to re-engage Miles so they are well placed to resume their operations once the Coronavirus restrictions are lifted. After being made redundant, Miles had registered an intent to claim with Services Australia for access to the Job Seeker Payment and the Coronavirus Supplement. Miles is single, with no children and in total he would be eligible to receive 51,124.50 before tax per fortnight.
If Miles chooses to be re-hired by the gym, under the Job Keeper Payment he will receive 51,500 a fortnight before tax while he is stood down. Miles will need to advise Services Australia of his income. He is no longer eligible for the Job Seeker Payment and the Coronavirus Supplement from Services Australia as a result of receiving the Job Keeper Payment.
Scenario 4 – Employer with 5 employees that all currently get paid more than $1500 per fortnight
Sara runs a landscaping company, and employs five full-time gardeners. Sara is paying her employees
$1,700 per fortnight before tax. She expects that her turnover will decline by more than 30 per cent over the coming months and that she will either need to lay staff off, or reduce their wages significantly.
As a result of the Job Keeper Payment, Sara will be able to keep employing every gardener, and only needs to pay the $200 wage cost per fortnight before tax per employee above the $1,500 per fortnight (before tax) Job Keeper Payment.
For more information or to learn if you qualify please email us on email@example.com or call (08) 9440 7100.