The JobKeeper Payment. Are you elibible for it? How do you claim it? The devil is always in the detail and in her continuing series of COVID-19 business support blogposts, Jennifer Lawrence, Master Builders Senior Adviser, Industry Policy answers your questions and unpacks.
Are you struggling to keep track of what’s available to help businesses in these uncertain times? We hear you and we’re here to help! ?In this series of blog posts, we’ll cover topics to help your business survive COVID. Find out more about cash flow, income support, what’s available from the banks, tax relief and more.
Business impacted by the coronavirus will be able to access a subsidy from the Government to continue paying employees. The subsidy will be a fortnightly payment of $1500 per eligible employee from 30 March 2020 for a maximum of six months.
Is my business eligible?
If your business has a turnover under $1 billion, is not a bank and is experience a decrease in turnover of at least 30% compared to a year ago – congrats, you’re eligible!
Am I eligible to receive the Payment?
If your business is eligible, you are self-employed and do not have any employees you will be eligible to apply for the Payment.
If your business is eligible and your business structure is a sole trader you will be eligible to apply for the JobKeeper Payment in addition to your employees.
Are my employees eligible?
Your employees are eligible if on 1 March 2020 they:
- Are employed full-time, part-time or as a long-term casual (at least one year); and
- Are at least 16 years old; and
- Are an Australian citizen, or hold one of these visa types – permanent, protected special category, non-protected special category (who’s been residing continually in Australia for 10 years or more), or subclass 444.
Employees can only receive a JobKeeper Payment from one employer and must declare this as income, which may affect their eligibility for other payments from Services Australia.
What do I need to do?
- Go to: https://www.ato.gov.au/general/gen/JobKeeper-payment/
- Click on: Register now for JobKeeper updates
- Complete the form by filling in your: business name, ABN, contact name, email address and mobile number.
- The ATO will contact eligible businesses when online applications open.
- Once applications are open you will need to identify your eligible employees.
I’ve lodged my application and it’s been approved. What next?
Tell your employees that they will receive the JobKeeper Payment
- Pay each eligible employee at least $1,500 per fortnight before tax.- For employees that currently earn this much or more, you continue to pay their wages and superannuation as normal and receive a reimbursement each month that is equivalent to $1,500 per fortnight per employee.
– For employees that currently earn less than this, you must increase their pay before tax to a minimum of $1,500 per fortnight, you can choose to pay superannuation on their typical wage or to bump this up to provide super on the additional funds as well.
- Update the ATO each month to confirm the eligible employees in your business.
When will I receive the payment?
- The ATO will make monthly payments to businesses in arrears.
- The first payment will be made to employers in the first week of May 2020 and will cover the month from 30 March 2020.
Can I claim the Apprentice Wage Subsidy and the JobKeeper Payment?
You can’t claim both at the same time. However, you can claim one and then transfer to the other.
In other words, if you meet the eligibility for the Apprentice Wage Subsidy and the JobKeeper Payment, you should:
- Contact your local Australian Apprenticeship Support Network now to register for the Apprentice Wage Subsidy to receive a reimbursement of half of the wages paid to the apprentice for January to March 2020, and
- Register your interest for the JobKeeper Payment on the ATO website. The ATO will then contact you to apply for the Payment and nominate your eligible employees. JobKeeper Payments are paid to employers monthly in arrears with the first payment period commencing 30 March and the payment being made in early May. The payment is $1500 per employee per fortnight (noting that this will become the minimum amount the employee must be paid before tax).
Wait, what? I’m still confused.
Click the links to find more information about the JobKeeper Payment and check out the case studies below:
Case Study 1: Sole Trader
Melissa is a sole trader running an interior painting business. She does not have employees. Melissa’s business has been in operation for several years. The economic downturn due to the Coronavirus has adversely affected Melissa’s business, and she expects that her business turnover will fall by more than 30 per cent compared to a typical month in 2019. Melissa will be able to apply for the JobKeeper Payment and would receive $1,500 per fortnight before tax, paid on a monthly basis.
Case Study 2: Employees on different wages
Adam is an owner builder with two employees. The business is still operating at this stage but Adam expects that turnover will decline by more than 30 per cent in in the coming months. The employees are:
- Anne, a permanent full-time employee on a salary of $3,000 per fortnight before tax and who continues working for the business; and
- Nick, a permanent part-time employee on a salary of $1,000 per fortnight before tax and who continues working for the business.
Adam is eligible to receive the JobKeeper Payment for each employee. This would have the following benefits for his business and employees:
- The business continues to pay Anne her full-time salary of $3,000 per fortnight before tax. The business will receive $1,500 per fortnight from the JobKeeper Payment to subsidise the cost of Anne’s salary. The business will continue paying the superannuation guarantee on Anne’s income
- The business continues to pay Nick his $1,000 per fortnight before tax salary and an additional $500 per fortnight before tax, totalling $1,500 per fortnight before tax. The business receives $1,500 per fortnight before tax from the JobKeeper Payment to subsidise the cost of Nick’s salary. The business must continue to pay the superannuation guarantee on the $1,000 per fortnight of wages that Nick is earning. The business has the option to pay superannuation on the additional $500 (before tax) paid to Nick under the JobKeeper Payment.
Adam can register his initial interest in the scheme from 30 March 2020, followed subsequently by an application to ATO with details about his eligible employees. In addition, Adam is required to advise his employees that he has nominated them as eligible employees to receive the payment. Adam will provide information to the ATO on a monthly basis and receive the payment monthly in arrears.
Case study 3: Employees that have been stood down
Ben runs a concreting business in Melbourne. Ordinarily, he employs three permanent part-time concreters, but business has dried up and he has decided to shut the business. As such he has been forced to stand down his three concreters without pay. Ben’s turnover will decline by more than 30 per cent, so he is eligible to apply for the JobKeeper Payment for each employee, and pass on $1,500 per fortnight before tax to each of his three concreters for up to six months. Ben will maintain the connection to his employees, and be in a position to quickly resume his operations. Ben is required to advise his employees that he has nominated them as eligible employees to receive the payment. It is up to Ben whether he wants to pay superannuation on the additional income paid because of the JobKeeper Payment. If Ben’s employees have already started receiving income support payments like the JobSeeker Payment when they receive the JobKeeper Payment, they will need to advise Services Australia of their new income.
Case study 4: Sole trader with employees
Heidi is a sole trader running a bricklaying business and has one permanent part-time employee, Megan, who earns $1,000 a fortnight before tax.
Heidi’s business has been adversely affected by the Coronavirus, and her turnover has dropped by more than 30 per cent. Megan is still working at Heidi’s business. Under the Jobkeeper Payment, Heidi is eligible to make a claim for the JobKeeper Payment for Megan for a maximum of six months. Heidi can also claim for herself. This will support Heidi to continue her business operations.?
Heidi is required to advise Megan that she has been nominated to the ATO as an eligible employee to receive the payment.
Heidi receives $1,500 per fortnight before tax from the JobKeeper Payment which will subsidise the cost of Megan’s salary. Megan will continue to receive her $1,000 per fortnight before tax salary and an additional $500 per fortnight before tax, totalling $1,500 per fortnight before tax. Heidi must continue to pay superannuation guarantee on the $1,000 per fortnight of wages that Megan is earning.
Heidi has the option of choosing to pay superannuation guarantee on the additional $500 paid to Megan under the JobKeeper Payment. Heidi also may be eligible to receive assistance through the Boosting Cash Flow for Employers measure.