JobKeeper: What is it & is my business eligible for it?

On 8 April 2020, the Federal Government passed legislation on Scott Morrison’s $130 billion JobKeeper scheme. As the largest stimulus package the country has ever seen, it’s intended to support businesses and employees through the tumultuous months to come.

So is your business eligible for the payments, and if so how do you apply? We explain everything you need to know.

What is JobKeeper?

JobKeeper is the latest – and by far the largest – lifeline package delivered by the Australian Government to support businesses and their staff through the COVID-19 pandemic.

Hundreds of thousands of workers have already been displaced due to business shutdowns and the flow-on effects of major financial disruption. This package will subsidise employees’ wages, alleviating some of the pressure on owners to retain their workforce despite a marked decrease in business activity.

Offering fortnightly payments of $1,500 per employee, it’s hoped that JobKeeper will keep about six million people employed for at least the next six months.

As of the day legislation passed (Wednesday 8 April), more than 750,000 businesses had already signed up to the scheme – with that number certain to balloon over the coming weeks and months.

Who is eligible for JobKeeper?

There are a number of key criteria that your business and your employees must meet for JobKeeper payments to be made:

  • Eligible businesses may include companies, trusts, partnerships, sole traders, not-for-profits and charities.
  • Businesses turning over less than $1 billion per annum must have lost at least 30% of their revenue compared to a comparable period one year ago.
  • Businesses turning over more than $1 billion per annum must have lost at least 50% of their revenue compared to a comparable period one year ago.
  • The threshold for registered charities is a loss of 15% or more turnover.
  • Full-time, part-time and casual staff must have been employed regularly by the same employer for at least 12 months as of 1 March 2020.
  • Staff must be at least 16 years old.
  • Public-sector employees are ineligible for JobKeeper.
  • Eligible employees must be an Australian citizen, a permanent visa holder, on a special category visa, on a non-protected special category visa and continually resided in Australia for at least the past decade, or a New Zealander on the Subclass 444 Special Category visa.

The Prime Minister specifically pointed out that New Zealanders on 444 visas will have no trouble receiving the payment, saying “they are part of an ongoing economy in Australia”.

If you have staff on special category visas, we recommend ensuring all visa details are updated when you apply for JobKeeper to avoid any potential issues with receiving payments.

How much is it worth?

Businesses that have been adversely affected by the COVID-19 pandemic will receive $1,500 per fortnight for every eligible employee, which is about 70% of the national median wage.

This figure is about $400 per fortnight more than the JobSeeker payment, although it’s important to note that employees cannot obtain both the JobKeeper and JobSeeker payments simultaneously.

If your staff were earning less than $1,500 per fortnight, they will effectively get a raise. You must pay them the full JobKeeper amount ($1,500 minus PAYG withholding).

What about super and tax?

Employers need to continue paying the superannuation guarantee on top of regular wages, however it has been reported that “it is up to employers whether they pay superannuation on additional JobKeeper payments”.

It’s also worth pointing out that these JobKeeper payments are taxed. Since it’s payed to your employees through you – not by the Government directly – it’s the same as any other income your staff would typically pay tax on. JobSeeker payments, however, are not taxed.

When will JobKeeper payments begin?

Ostensibly, businesses can start paying their employees the $1,500 fortnightly figure immediately and then claim that money back from the ATO in May – this is what the Morrison Government is urging all business owners to do.

However, that may not be possible for companies that are already in dire financial straits. In such cases, owners may have to wait until the JobKeeper payments start rolling out in earnest at the start of May.

The current package is guaranteed for the next six months.

How do I apply for JobKeeper?

Head to the dedicated JobKeeper payment page on the ATO’s website. Here, you will need to register your interest and submit key business information, such as your business name, ABN and contact details.

You don’t need to contact the ATO directly via phone. Simply register your interest and they will update you on the steps to follow.

What about staff who have already been stood down since the pandemic?

If you have been forced to stand down employees due to the financial downturn, you are more than welcome to rehire them and use the JobKeeper payment to subsidise their wages – so long as they are eligible (i.e. were continually employed by you for at least 12 months prior to 1 March 2020, and they meet all the other criteria).

Before registering your staff for the JobKeeper payment, ensure all their employment paperwork, including relevant visa and work entitlement documents, are up to date. Using CVCheck’s secure online platform you can confirm your employee’s work entitlements within Australia quickly, confidentially and affordably. Contact one of our background screening experts for more information.

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