Understanding JobKeeper

The Labor Party and the union movement have been arguing for a wage subsidy for workers to make sure jobs are protected during the COVID-19 global pandemic.

Thanks to the persistent work of the unions and Labor, Prime Minister Scott Morrison announced on 30 March 2020 that the Federal Government would pay a wage subsidy to certain workers impacted by the COVID-19 restrictions. On 8 April 2020, the Federal Parliament passed legislation to enable this scheme.

But the Government’s wage subsidy still sees a large number of workers in NSW missing out on payment, including:

  • Over 1 million casuals nationwide;
  • Many school and university workers;
  • NDIS workers;
  • Temporary and local government workers; and
  • Many charities, arts and entertainment workers.

Labor will continue to fight so that everyone who needs wage subsidy support can access it. See our petition: www.alp.org.au/wagesubsidynow

What is the eligibility criteria for employers?

  • For businesses including companies, partnerships, trusts and sole traders, not-for-profits and charities.
  • Business has a turnover of less than $1 billion and the turnover has fallen by more than 30 per cent (of at least a month); or
  • Business has a turnover of $1 billion or more and the turnover has fallen by more than 50 per cent (of at least a month);
  • 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.


What do eligible employers need to do?

Employers should register their interest for the JobKeeper payment now via the ATO at www.ato.gov.au/Job-keeper-payment

Eligible employers will need to identify eligible employees for JobKeeper payments. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or re-hired).

Must provide monthly updates to the ATO, including reporting the number of eligible employees employed by the business.

Participating employers will be required to ensure eligible employees receive at a minimum, $1,500 per fortnight, before tax.

Employers must continue to pay the superannuation guarantee on regular wages but it will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper payment.

Notify all eligible employees that they are receiving the JobKeeper payment.


What if I have a business without employees or I am self-employed?

Businesses without employees, such as the self-employed are eligible.

Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.

People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to your bank account.


What about if a business or not-for-profit was not in operation a year earlier, or if the turnover a year earlier was not representative of their usual or average turnover?

The Tax Commissioner will have discretion to consider additional information that the business or not-for-profit can provide to establish that they have been significantly impacted by the Coronavirus pandemic.

Businesses that are in liquidation will not receive the payment.

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 has ceased or significantly curtails its operations).

There will be some lenience where employers, in good faith, estimate a 30 per cent or more or 50 per cent or more fall in turnover but actually experience a slightly smaller fall.


What about charities?

For charities registered with the Australian Charities and Not-for-profits Commission (ACNC), they are eligible for the subsidy if they estimate their GST turnover has fallen or will likely fall by 15 per cent or more relative to a comparable period.

The lower turnover decline test does not apply to universities and non-government schools that are registered charities, who will remain subject to the turnover decline tests for other not-for-profits and businesses.

What is the eligibility criteria for employees?

  • Currently employed by an eligible employer (applies to people those stood down/re-hired).
  • Were employed by an eligible employer at 1 March 2020.
  • Workers that are/were full-time, part-time, or sole traders at 1 March 2020.
  • Long-term casuals, which are defined as people that have been casually employed on a regular basis for longer than 12 months as at 1 March 2020.
  • Need to be at least 16 years of age.
  • 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 New Zealander on a Special Category (subclass 444) Visa Holder.
  • Gig economy workers will also be covered, as they are sole traders.

Unfortunately if you are receiving Parental Leave Pay from Services Australia, you are not eligible for the JobKeeper payment. However, if you are on parental leave from your employer you will be eligible.

You are eligible for the JobKeeper payment if you are receiving workers compensation – if you are working, for example on reduced hours. However, you will not be eligible if you are not working.


What do employees need to do?

If you have multiple employers, only one employer will be eligible to receive the payment, you must notify the employer that is your primary employer.

If you are not an Australian citizen, you must notify your employer of your visa status, so your employer can determine if you are an eligible employee.

If you are receiving or have applied for an income support payment you should advise Services Australia of your change in circumstances and report the JobKeeper payment as income online at my.gov.au or by telephone on 133 276.


What if I have been stood down/made redundant?

If you have been stood down, your employer must pay you, at a minimum, $1,500 per fortnight, before tax.

Employees of businesses that shut down due to various restrictions – such as cafes, restaurants, theatres etc will continue to get the JobKeeper subsidy even if they are not working.

If you were employed on 1 March 2020, and your employment has ceased/or you were made redundant, your employer is able to re-engage you and you will be entitled to receive at a minimum, $1,500 per fortnight, before tax.


What if I earn under or over $1,500 a fortnight normally?

For employees that have been receiving less than $1,500 per fortnight, your employer is required to top up your payment to $1,500 per fortnight, before tax.

For those employees earning more than $1,500 per fortnight, the employer is able to provide a top-up, however there is no requirement for employers to make up the difference.


What if I am receiving the JobSeeker payment or income support payments?

You cannot receive the JobKeeper payment and also receive the JobSeeker payment (formerly Newstart).

The income you receive from the JobKeeper payment will cancel out your eligibility for the JobSeeker payment. You will only receive one payment.

If you have already applied for JobSeeker, you can withdraw and change to JobKeeper payments if you are re-engaged by your employer/if they are registering you as an employee to receive JobKeeper.

If you have already applied for the JobSeeker payment it is best not to cancel your JobSeeker application until the JobKeeper legislation has passed Parliament and your employer has informed you that you will receive the JobKeeper payment.

If you are receiving any income support payments, report the JobKeeper payment as income online at my.gov.au or by telephone on 133 276.


How will JobKeeper be paid?

Employers need to apply for the JobKeeper subsidy.

Eligible employers will be paid $1,500 per fortnight per eligible employee from 30 March 2020, for six months.

Payments will be made to the employer monthly by the Australian Tax Office.

Employers will pass on the payments to employees.


What is the timing?

The subsidy starts on 30 March, however payments begin in the first week of May and will be backdated to 30 March.

Payments will last for 6 months.

Employers should register their interest for the JobKeeper payment NOW via www.ato.gov.au/Job-keeper-payment/


Looking for more information?

Further information on understanding JobKeeper can be found in this “Guide to the JobKeeper Scheme, April 2020: Employment in the time of COVID-19”


The information above is current at 14 April 2020.

For further enquiries or assistance, please contact my office on (02) 9230 2822.