JobKeeper Program Details

JobKeeper Payments

The Government has now passed legislation to allow the implementation of the JobKeeper payments to employers and other eligible participants. If eligible, the Government will pay a wage subsidy of $1,500 per eligible employee. The payments will be taxable to the employers and tax-deductible when paid to employees as wages.

JobKeeper will essentially be based on fortnights between 30 March 2020 to 27 September 2020. Called “Jobkeeper fortnights”

In order to assess if you are eligible you need to work through the following criteria:

Do You Qualify?

If you are carrying on a business on 1 March 2020, or are a non-profit body that pursued its objectives principally in Australia on 1 March 2020 you will qualify provided:

a) Your entity satisfies the “decline in turnover test” at or before the time it qualifies for the job keeper payments. The relevant thresholds are as follows:

The decline in projected GST turnover applies to either:

a) A calendar month that ends after 30 March 2020 and before 1 October 2020;or
b) A quarter that starts on 1 April 2020 or 1 July 2020.

As compared with the corresponding period in 2019.

GST turnover includes taxable supplies and GST free sales but excludes input taxed supplies.

You can apply to the ATO for commissioner discretion if you believe this is not an appropriate comparison period.

Example

Patrick Enterprises assesses its eligibility for JobKeeper payments on 6 April 2020 based on a projected GST turnover for April 2020 of $6 million. It considers that the comparable period is the month of April 2019 for which it had a current GST turnover of $10 million. The April 2020 turnover falls short of the April 2019 turnover by $4 million, which is 40% of the April 2019 turnover. This exceeds the specified percentage, so the decline in turnover test is satisfied.

2. Who are eligible employees?

An individual is an eligible employee of an entity for a fortnight if on 1 March 2020:

(a) the individual was aged 16 years or over; and

(b) the individual was:

(i) an employee (other than a casual employee) of the entity; or

(ii) a long term casual employee of the entity (with more than 12 months of regular and systematic employment); and

(i) was an Australian resident (within the meaning of section 7 of the Social Security Act 1991); or

(ii) was a resident of Australia for the purposes of the Income Tax Assessment Act 1936 and was the holder of a special category visa referred to in the regulations under the Migration Act 1958 as a Subclass 444 (Special Category) visa.

An individual is excluded from being an eligible employee of an entity for a fortnight if:

(a) parental leave pay is payable to the individual and the individual’s PPL period overlaps with, or includes, the fortnight; or

(b) at any time during the fortnight, the individual is paid dad and partner pay; or

(i) the individual is totally incapacitated for work throughout the fortnight;

(ii) an amount is payable to the individual under, or in accordance with, an Australian workers’ compensation law in respect of the individual’s total incapacity for work;

(iii) the amount is payable in respect of a period that overlaps with, or includes, the fortnight.

You must also notify your employee that you have applied for JobKeeper payments on their behalf within 7 days of informing the ATO. Attached is a form that both you and your employee needs to sign for ATO records. We also recommend that you get the employee to sign an acknowledgement and confirm they are not receiving JobKeepeer from any other employer. You must notify the ATO if an employee informs you that you are not their primary employer.

You are not required to notify employees who are not eligible, but you can do so if you wish. Please see the appendix for sample notification and acknowledgement letters.

As an employer you are also not obligated to participate in the JobKeeper program.

3. Do you satisfy the wage condition?

An employer satisfies the wages condition for an Individual for a fortnight if the sum of the amounts paid is equal to or exceeds $1,500 in wages, salary, commissions, bonuses or allowances. These amounts must be subject to withholding.

Employers can elect to top up employees on low incomes to meet the fortnight threshold in order to make the employees eligible. Employers will not be required to pay super guarantee on the top up amounts. However, you can if you like.

4. Have you elected to participate?

If you are eligible to participate you need to notify the ATO of your eligible employees and their details before the end of the relevant fortnight. For the first and second fortnights you will need to notify the ATO prior to the 26 April 2020.

5. What are my ongoing obligations

The employer must report its monthly GST turnover and projected turnover for the following month within 7 days of the end of each month. Therefore the first report will be due on the 7th May 2020.

The ATO will then pay the JobKeeper payment of $1,500 per eligible employee per eligible fortnight not later than 14 days after the end of the calendar month. Therefore the first payment shall be due around the 14th May 2020.

6. Am I eligible for the payment as a business owner?

If your business qualifies for the JobKeeper payment you will also be able to nominate one “eligible business participant” per fortnight to receive an additional $1,500. Eligible business participants cannot be eligible employees of other entities and must be actively engaged in the business conducted by the entity. Eligible business participants must be an individual who is also one of the following:

An entity is not entitled to a JobKeeper payment unless the entity had an ABN on 12 March 2020 and the entity

a) Carried on a business during the 2019 financial year and had lodged its tax return prior to 12 March 2020. Or
b) The entity made a taxable supply between 1 July 2018 and 12 March 2020 and lodge the appropriate activity statement by 12 March 2020.

7. What if my decline in turnover is not what I thought it would be?

There is the risk that you might assume your decline in turnover will be more than the relevant thresholds however it is actually less. If this is the case you might have to pay the JobKeeper payments back to the ATO plus interest. There will be some tolerance if the fall in turnover is slightly less than the relevant decline in turnover percentage. We would urge you to keep records on how you estimated the projected turnover.

Appendix A – Notify Employee eligible for JobKeeper

Memorandum

To: All Eligible Employees

Re: JobKeeper Payment

Date:

______________________________________________________________________________________________________________

The Federal Government has recently introduced legislation confirming a new JobKeeper subsidy. The JobKeeper subsidy is a payment that assists eligible employers impacted by COVID-19 to continue to pay eligible employees.

Eligible employers can claim a payment of $1,500 per fortnight per eligible employee from 30 March 2020, for a maximum period of 6 months.

This memorandum is to confirm that { INSERT COMPANY NAME } will be participating in the JobKeeper scheme. This will allow us to continue to operate our business throughout this crisis, and in turn, keep our employees in jobs as much as possible.

We have nominated you as an eligible employee under the JobKeeper scheme. This means that {INSERT COMPANY NAME } will receive a payment of $1,500 per fortnight from the Government to subsidise your wages.

Employees still working

If you are still working, you will be paid your normal wages based on the hours you work. If you typically receive less than $1,500 before tax per fortnight, you will still be paid the full amount of $1,500 per fortnight, before tax. If you typically receive more than $1,500 before tax per fortnight, you will still receive your normal wages.

Employees on stand down

If you have been stood down, you will be paid $1,500 per fortnight before tax, even if you typically earn less than $1,500 per fortnight. If you typically earn more than $1,500 before tax, you will not be paid over and above the $1,500 JobKeeper payment.

For more information on the JobKeeper subsidy, please see the Treasury website at https://treasury.gov.au/coronavirus/jobkeeper.

If you have any further questions or concerns in relation to this matter, please contact _______ on _________ .

ACKNOWLEDGEMENT

I __________________________________________ (please print name) hereby acknowledge that I have received, read and understand the details confirmed in this memorandum regarding the JobKeeper arrangement, and agree to be an eligible employee for the purposes of the JobKeeper scheme. I also understand that all contents of this letter are private and confidential.

Signed:	_____________________
Dated:	_____________________

Appendix B – Notify employee not eligible for JobKeeper Payment

Memorandum

To:

Re: JobKeeper Payment

Date:

______________________________________________________________________________________________________________

Eligible employers can claim a payment of $1,500 per fortnight per eligible employee from 30 March 2020, for a maximum period of 6 months.

Unfortunately, you do not meet the eligibility criteria for { INSERT COMPANY NAME } to claim the JobKeeper payment to subsidise your wages. We appreciate that this may result in further financial hardship for you and as such we encourage you, if you have not already, to contact Services Australia about your individual circumstances and to discuss whether you would be eligible for JobSeeker payments.

As the JobKeeper subsidy is available to businesses for a period of six months until 27 September 2020,

{ INSERT COMPANY NAME } will continue to assess your eligibility for this subsidy and will keep you fully informed of any changes that may affect your eligibility as soon as possible.

We would like to take the opportunity to thank you for your continued patience and loyalty during this difficult time.

For more information on the JobKeeper subsidy, please see the Treasury website at https://treasury.gov.au/coronavirus/jobkeeper.

If you have any further questions or concerns in relation to this matter, please contact __________ on ___________ .

ACKNOWLEDGEMENT

I __________________________________________ (please print name) hereby acknowledge that I have received, read and understand the details confirmed in this memorandum regarding the JobKeeper arrangement. I also understand that all contents of this letter are private and confidential.

Signed:	_____________________
Dated:	_____________________

Appendix C – Employer not participating in JobKeeper Program

Memorandum

To: All Employees

Re: JobKeeper Payment – Non-Participation

Date:

______________________________________________________________________________________________________________

Eligible employers can claim a payment of $1,500 per fortnight per eligible employee from 30 March 2020, for a maximum period of 6 months.

This memorandum is to confirm that whilst our business may be deemed eligible to participate in the scheme, due to the unprecedented and significant cost COVID-19 has had on our operations and subsequent cashflow, we have made the difficult decision to not participate in this scheme at this time. As a result, we will not be receiving the JobKeeper payments from the Government.

As the JobKeeper subsidy is available to businesses for a period of six months until 27 September 2020, we will notify you if our ability to participate in the subsidy changes.

We encourage all employees to contact Services Australia about their individual circumstances and to discuss whether they are eligible for JobSeeker payments.

We would like to take the opportunity to thank you for your continued patience and loyalty during this difficult time.

For more information on the JobKeeper subsidy, please see the Treasury website at https://treasury.gov.au/coronavirus/jobkeeper.