What do I need to know about the JobKeeper

This is broken into two sections so you are able to focus on what is relevant to you. While payments are pivotal in the decision making for employers right now, it is also important for employees to understand their rights and requirements.

The JobKeeper payment is designed to help businesses retain employees by paying a wage subsidy for a six month period. The payments will be $1,500 per fortnight before tax and backdated to 30 March 2020. The JobKeeper bill also provides flexibility to adjust and reduce hours and allow agreements to pay annual leave at a half-rate for twice the length of time.

The Government retains the right to cancel, revoke, terminate or revoke payments with future legislation. It is imagined this would only occur in the event the pandemic ceases early.

For Employers

Income Test: To be eligible for the subsidy your business must:

  • have suffered, or be forecast to suffer, a reduction in GST turnover of,

    • 30% or more for most employers

    • 15% for ACNC registered charities,

    • 50% for businesses with GST turnover greater than $1bn, for

  • monthly reporters - the month/s March to September,

  • quarterly reporters - the March or June quarter, from

  • your corresponding GST period last year, which

  • only needs to be satisfied once to be eligible for the full period, and

  • an alternative test is available by application to the ATO and will be stringently applied for situations where the law has not operated in spirit. 

Please be aware that if you are not GST registered, the legislation makes amendments to treat you as if you are, and you will still be eligible. Carve-outs are also available for gifts received for deductible gift recipients, and for people operating solely overseas.  

Application: Applications will need to be made to the ATO to claim the subsidy. Your employees must provide you with a nomination notice disclosing eligibility before applying. Employees receiving Paid Parental Leave, Dad and Partner Pay, or Workcover that has left them unable to work are ineligible. Applications should be made before 27 April 2020 to be eligible from the start date (30 March 2020). You must then notify employees they've been elected for the payment within 7 days of application.

Payments: Future payments will be made monthly in arrears, no later than 14 days after the end of the month eligible payments were made in. The last eligible fortnight is the 27th September 2020, with the last payment due no later than 14th October 2020. You must report your current and projected GST turnover within 7 days at the end of each month you qualify (i.e. you report in the first week after month-end, the ATO pays you in the second week), although reported amounts do not affect eligibility. We expect payments will be made to the account used for BAS refunds, or where not available, the listed account on the latest income tax return. 

The ATO retains authority to recover any overpayments plus interest where the entity or employee is ineligible.

Employers will receive the payment for each eligible employee who was; employed on 1 March 2020, over the age of 16, continues to be engaged by that employer, and is a permanent full-time, permanent part-time, or a casual worker that was employed for over 12 months as at 1 March 2020. This includes stood down employees and employees who had been terminated but re-engaged, if they satisfied these employment conditions on 1 March 2020. Employees must be an Australian resident or a 444 special visa holder.

The JobKeeper payment will also apply to a single approved associate or sole trader where you were not considered an 'employee' on 1 March 2020 but had an active role in the business. The same conditions for an employee need to be met, including a nomination form to be completed, and for all entities excluding sole traders, a letter advising the election was made must be provided to the elected individual. Approved associates are:

  1. a director of a company, or

  2. a shareholder of a company, or

  3. a partner of a partnership, or

  4. an adult beneficiary of a trust. 

Once an individual is nominated, another individual cannot be 'exchanged' in a later fortnight.

Employees who normally receive more than $1,500 per fortnight in wages must still be paid their standard hourly rate however hours can be adjusted in limited circumstances under the Fair Work Act changes. You will receive the full $1,500 subsidy for employees who continue to receive normal wages.

If the employee ordinarily receives less than $1,500 per fortnight or is stood down without pay, they must be paid the minimum $1,500 per fortnight, regardless of the hours they actually work. The $1,500 can be made up of:

  • net amounts paid to the employee,

  • tax withheld,

  • salary sacrificed amounts to the employee's super fund, 

  • any other manner agreed by the individual and the employer as reasonable.

Superannuation must still be paid on the usual basis (on Ordinary Time Earnings for hours worked) however, it is not compulsory to pay super on any additional amount up to $1,500.


For Employees

Eligible employees are employees who are:

  • currently employed (including those stood down or terminated but re-hired and were employed at 1 March 2020), and

  • are full-time, part-time or long term casual, being a casual who was employed longer than 12 months on 1 March 2020, and

  • are at least 16 years old, and

  • are an Australian citizen, permanent resident or holder of a special category 444 visa.

You are only able to claim the JobKeeper payment through one employer. Where you would be eligible to receive the payment from two different employers, you must nominate the primary employer. You are required to provide a nomination form advising you are eligible before your employer can make the application. 

Your employer is required to advise you they have made the application on your behalf within 7 days.

Your employer is required to pay you a minimum of $1,500 per fortnight, but no less than your usual remuneration where you are still working those hours and you haven't voluntarily agreed to a reduction. The $1,500 can be made up of:

  • net amounts paid to you,

  • tax withheld,

  • voluntary salary sacrificed amounts to your super fund, 

  • any other manner agreed by you and the employer as reasonable.

Receiving the JobKeeper payment will affect your eligibility for JobSeeker payments through Services Australia. You must report any JobKeeper payments you receive as income to Services Australia and will be liable to repay any money you had received incorrectly. 

The amount received through the JobKeeper payment is higher than that received through JobSeeker.

If you or your employer doesn't meet the eligibility criteria or does not sign up for the payments, or you have been terminated with no chance of re-hiring, you will not be eligible to claim the JobKeeper payment. You may still be eligible to claim the JobSeeker payment through Services Australia.

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