The Government yesterday announced a new $130bn wage subsidy plan in an effort to assist employers retain staff over the next 6 months. Here are the key details of the plan.
1. Who is eligible?
Eligible employers will be those with annual turnover of less than $1 billion who self-assess that have a reduction in revenue of 30% or more, since 1 March 2020 to a comparable period a year ago (of at least a month).
FURTHER GUIDANCE ON DETERMINING A REDUCTION IN REVENUE:
Where a business was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (e.g. because there was a large interim acquisition, they were newly established or their turnover is typically highly variable), the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been adversely affected by the impacts of the Coronavirus.
The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business ceases or significantly curtails its operations).
There will be some tolerance where employers, in good faith, estimate a greater than 30% fall in turnover but actually experience a slightly smaller fall.
You employ long term casuals (with you for greater than 12 months).
You have part-time and full-time employees which were employed as at 1 March and if they have been stood down already, you will rehire them.
Eligible employers include businesses structured through companies, partnerships, trusts and sole traders and not for profit entities.
Self-employed individuals (ie businesses without employees) that meet the turnover tests are eligible to apply for JobKeeper Payments.
The employees must also be either an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder.
2. The payments
The eligible employers must pay the eligible employees at least the $1,500 payment per fortnight, even if their regular wage per fortnight is less than $1,500.
The fortnightly $1,500 payment will start to be issued from 1 May 2020 and will be backdated to 30 March 2020.
The payments will be delivered through the ATO to the employer who in turn will pass on the payment to the employee.
The employer must inform the eligible employee that they will receive the JobKeeper payment and must pay the eligible employee a minimum of $1500 per fortnight, before tax. This payment will not attract superannuation.
The employer may wish to pay an amount additional to the JobKeeper payments. ie the JobKeeper payment can act as a top-up for the employer to retain an employee’s current pay.
3. The application process
Initially, employers can register their interest in applying for the JobKeeper Payment through the ATO by clicking here from 30 March 2020.
Subsequently, eligible employers will be able to apply for the scheme by means of an online application.
The first payment will be received by employers from the ATO in the first week of May.
Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO.
Please note that these measures are not yet law and we will update you once more details come to light. In the meantime, you can find more information here .
To find out more, please contact us today.