Good news for Small Business - JobSeeker Payment
Finally, a package aimed at small businesses. Sole traders, self-employed people, partnerships and trusts will be eligible. Both the employer and employee must meet eligibility criteria.
As part of the stimulus package, the Federal Government has unveiled the third and largest package to date. Businesses will receive a fortnightly wage subsidy up to $1,500 per employee as part of a Federal Government economic stimulus package.
The new measure will commence 30 March 2020, with the first payments to be received by employers in May. Employers must continue to pay employees and then claim the money.
The wage subsidy will include not-for-profit employees and New Zealanders who work in Australia but are typically unable to access welfare programs.
How do I apply?
The ATO have issued instructions to please do not phone. You can register your interest below and they will send you updates. They are also experiencing high volumes of traffic via web and phone so please keep it simple for everyone.
To register please click here
Then what happens for employers?
Employers must:
Assess that they have or will experience the required turnover decline;
Provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 01 March 2020 and those currently employed by the business (including those stood down or rehired).
For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.
Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). For employees that were already receiving this amount from the employer then their income will not change. For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500, before tax. And for those employees earning more than this amount, the employer is able to provide them with a top-up.
Notify all eligible employees that they are receiving the JobKeeper Payment.
Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.
Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.
Employer eligibility
Employers will be eligible for the subsidy if:
their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
the business is not subject to the Major Bank Levy (ie Big Bank).
the employer must have been in an employment relationship with eligible employees as at 01 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.
Businesses without employees
Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via www.ato.gov.au from 30 March 2020. 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 the individual’s bank account. Further details for the self-employed will be provided on www.ato.gov.au
Can I receive this if I’ve been stood down?
Yes - If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax. See further info in the Treasury release as there are criteria to meet.
Will I receive $1,500 even if I ordinarily earn less?
If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay them, at a minimum, $1,500 per fortnight, before tax.
What about superannuation?
It is up to employer whether they pay superannuation on additional job keeper payments. For example, if you have an employee who usually works part-time and receives $1,000 per fortnight plus super of $95, the employer can choose whether to pay super on the additional $500 the employee will receive.
Think it’s going to get tricky? Yes.
This has not been legislated yet, and as this space is changing rapidly each day please keep in touch with your advisor.
Please also remember that the business must have the cash flow available in order for this to work.
The full Treasury release is available here
See the examples provided in Treasury release:
Employer with employees on different wages
Adam owns a real estate business 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, who is a permanent full-time employee on a salary of $3,000 per fortnight before tax and who continues working for the business; and •Nick, who is 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, which would have the following benefits for the business and its employees: •The business continues to pay Anne her full-time salary of $3,000 per fortnight before tax, and the business will receive $1,500 per fortnight from the JobKeeper Payment to subsidise the cost of Anne’s salary and will continue paying the superannuation guarantee on Anne’s income;
Last updated: 30 March 20203 •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 which will 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 of choosing 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.
Employer with employees who have been stood down without pay
Zahrah runs a beauty salon in Melbourne. Ordinarily, she employs three permanent part-time beauticians, but the government directive that beauty salons can no longer operate has required her to shut the business. As such she has been forced to stand down her three beauticians without pay. Zahrah’s turnover will decline by more than 30 per cent, so she is eligible to apply for the JobKeeper Payment for each employee, and pass on $1,500 per fortnight before tax to each of her three beauticians for up to six months. Zahrah will maintain the connection to her employees, and be in a position to quickly resume her operations. Zahrah is required to advise her employees that she has nominated them as eligible employees to receive the payment. It is up to Zahrah whether she wants to pay superannuation on the additional income paid because of the JobKeeper Payment. If Zahrah’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.