The Federal Government announced 30 March 2020 that it intends to pass legislation to introduce a wage subsidy, called the JobKeeper payment, for eligible businesses impacted by COVID-19.
According to information released yesterday (30 March 2020), the key details of the proposed JobKeeper payment are:
- It will be a flat payment of $1,500 per fortnight, per eligible employee, which can be claimed from 30 March 2020 for a maximum period of 6 months;
- The payment will be made to eligible businesses, which are:
- Those businesses with an annual turnover of less than $1 billion, with a reduction in revenue of more than 30 per cent over a minimum one‐month period, relative to a comparable period a year ago.
- Those businesses with an annual turnover of $1 billion or more, with a reduction in revenue of more than 50 per cent over a minimum one‐month period, relative to a comparable period a year ago.
- Eligible employees are full-time and part-time employees, and casual employees with at least 12 months’ service, of at least 16 years of age who were employed as at 1 March 2020 and are currently employed (including employees who have been stood down by the business, or whose employment was terminated but have been re-hired). There are additional eligibility criteria in relation to citizenship, residency and visa arrangements.
- An employee cannot be an eligible employee in respect of more than one employer, and is not entitled to receive both the JobKeeper payment, and the Government’s recently announced JobSeeker payment.
- The payments will be made to eligible businesses by the Australian Taxation Office, on a monthly basis and in arrears, with the first payments being made in the first week of May 2020.
- Eligible businesses will have a legal obligation to pass on the entire wage subsidy to eligible employees, which means that employees who currently earn less than $1,500 per fortnight will receive additional income. The business may choose to but will not be required to pay superannuation on that additional income.
- Eligible businesses will be able to apply for the payment online, and are able to register their interest to receive updates on the Australian Taxation Office website.
It is not yet clear from the announcement how the subsidy will operate in practice in the diverse range of situations now faced by businesses.
The Federal Government has released a fact sheet, which includes some examples of how the proposed payment would apply to an employee who earns less than $1,500 per fortnight, and to employees who have been stood down without pay.
There will be further clarity once the legislation to introduce the subsidy is available, which is expected to occur shortly. We will update you once further details are available.