Economic Stimulus Response – Round 3
From everyone at Bishop Collins, we want to help!
One thing is sure that this crisis must end and each day that passes brings us closer to that end.
We simplified the following outline from the government fact sheet released 30 March 2020 and have included examples. The Jobseeker payments explained” title means we have tried to simplify what this means for your business.
You may have specific questions which are unique to you. We want to help so please contact us at Bishop Collins.
The Australian Government announced on 30 March 2020 a subsidy payment program to support employees and businesses. The JOBKEEPER PAYMENT is expected to cost $130 Billion across 2019-20 and 2020-21.
The JobKeeper Payment is a temporary scheme open to businesses impacted by the Coronavirus and is in addition to all previous stimulus measures announced on 12 March 2020 and 22 March 2020.
WARNING NOTE: The following information comes from the Australian Government – Treasury outlining the Government’s response. The following response must still pass legislation through Parliament before becoming legal. Please speak to your relationship manager at Bishop Collins before taking any action and for more information and clarity on how this will affect your business.
Supporting businesses to retain jobs
Under the JobKeeper Payment, businesses significantly impacted by the Coronavirus outbreak will be able to access a subsidy from the Government to continue paying their employees.
This assistance will help businesses to keep people in their jobs and re-start when the crisis is over.
For employees, this means they can keep their job and earn an income – even if their hours have been cut.
- The JobKeeper Payment is a temporary scheme.
- The JobKeeper Payment will also be available to the self-employed.
- The Government will provide $1,500 per fortnight per employee for up to 6 months.
- The scheme starts from 30 March 2020
There are a number of criteria which need to be satisfied with one of the key criteria being a reduction in comparative revenue of 30%.
As an example, if your revenue for April 2020 is likely to be less than your revenue for April 2019 by more than 30%, then based on the information available it appears that you would satisfy the criteria that your revenue ‘will be reduced by more than 30%’.
The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
Eligible employees are employees who:
- are currently employed by the eligible employer (including those stood down or re-hired);
- were employed by the employer at 1 March 2020;
- are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
- are at least 16 years of age;
- are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
- are not in receipt of a JobKeeper Payment from another employer.
If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from
Services Australia as they must report their JobKeeper Payment as income.
If the eligibility criteria is satisfied, you will be entitled to a wages subsidy of $1,500 per fortnight for eligible employees starting 30 March 2020.
If you expect that your revenue has or will decline (relative to the same period last year) by more than 30% for the period 1 April 2020 to 30 September 2020 then you should register your interest with the Australian Taxation Office by following this link:
Your interest should be registered for each business/entity which is being impacted by the current economic conditions.
Registering your interest will ensure that you are kept up to date in relation to developments in this area and that you are provided with information in relation to the application process as soon as it becomes available.
Assuming that legislation is passed giving effect to this announcement, the Government anticipates that employers will receive their first payment from the ATO under this scheme in the first week of May 2020.
If the eligible employee is ordinarily paid $1,500 gross per fortnight, you must pay them the full amount of the subsidy. If the eligible employee is ordinarily paid less than $1,500 gross per fortnight, you must pay them the full amount of the subsidy. If the eligible employee is ordinarily paid more than $1,500 gross per fortnight, the employee receives their ordinary salary and the wage subsidy assists you to fund the employment cost.
Superannuation will need to be paid in the usual way however it will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper payment. For example if an employee is ordinarily paid $1,000 per fortnight, the additional $500 per fortnight is not required to have superannuation paid on it.
Self-employed individuals, Sole Traders
Self-employed individuals will be eligible to receive the JobKeeper Payment where they have suffered or expect to suffer a 30 per cent decline in turnover relative to a comparable period a year ago (of at least a month).
Self-employed individuals will need to provide an ABN for the business, nominate an individual to receive the JobKeeper payment and provide that individual’s Tax File Number, as well as provide a declaration on the recent business activity.
These businesses will also need to provide a monthly update to the ATO in order to declare their continued eligibility for the JobKeeper Payment.
For more detailed information please click on the following link:
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