Mar 31, 2020
1. What is the concession?
Businesses who have seen their turnovers decline due to the COVID-19 pandemic will be able to access a wage subsidy from the Commonwealth Government of $1,500 per eligible employee, per fortnight, from 30 March 2020 for a maximum of six months.
The first payments will be received by eligible employers in the first week of May. These payments will be taxable, and therefore they will be deductible when paid to employees.
The government has not yet released the draft legislation for this concession, so only limited information is known at this point.
2. Is my business eligible?
If your business’ turnover is under $1 billion, your turnover must have reduced by at least 30% relative to a comparable period a year ago due to impacts of COVID-19. The minimum comparison period will be one month.
Businesses with turnover exceeding $1 billion, must see a reduction in turnover of at least 50%.
An eligible employee must be at least 16 years old and have been employed by the business at 1 March 2020. Businesses must confirm that the individual remains employed (even if they have been stood down temporarily or re-hired since that time) and earns more than $1,500 per fortnight. This is expected to be done through the Single touch payroll system.
Those employees on low incomes will need to have their income “topped up” to a minimum fortnightly payment of $1,500 in order for the business to receive the subsidy on their behalf. Employers will not be required to pay Superannuation Guarantee on such top up payments, however they have the discretion to do so.
Eligible employees include full-time, part-time or long-term casuals (i.e. casuals employed for longer than 12 months). Further, employees must be Australian citizens, holders of 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 Special Category (Subclass 444) visa holder in order to qualify for the subsidy. In addition, only one JobKeeper payment can be received per individual.
Not-for-profit entities and sole traders are also eligible to apply for the payments, provided they meet the turnover requirements.
From the limited information released on this concession, it appears that “turnover” will be measured as the entity’s ordinary income. In short, this is generally the total sales made by the business.
3. How do I access the concession?
At this stage, only registrations for interest are open by vising the ATO website. Soon, eligible employers will be able to apply through an online applications with the first payments received (including back pay from 30 March 2020) by the first week of May.
Self-assessment of JobKeeper entitlements will be the responsibility of employers, who must provide monthly updates to the ATO and inform employees that they’re nominated for the subsidy.
Sole traders / self-employed individuals who do not have “employees” will need to register their interest and nominate an individual to receive the payment.
Examples and further information can be found using the following links;
We are here to help
As you can see there is a significant amount to digest in these unprecedented times. We remain committed to assist you through the course of these events and are contactable as your needs arise. Please feel free to reach out so that we can apply this to your circumstances.