What Is The Job Keeper Payment?
The Job Keeper Payment is a payment made to eligible businesses and not-for-profits affected by the Coronavirus to support them in retaining employees.
Eligible businesses that elect to participate will receive a payment of $1,500 per fortnight per eligible employee to support the people they employed as at 1 March 2020 who are retained in employment.
Businesses must have paid their employees before they are entitled to receive the Job Keeper payment. Where an employee’s total remuneration is less than $1,500 per fortnight (before tax), or has been stood down, the employer must provide the employee at least $1,500 per fortnight (before tax). Where an employee earns more than $1,500 per fortnight, employers can use the payment to subsidise the employee’s wages. Self-employed individuals will also be eligible to receive the Job Keeper payment.
When Will The Job Keeper Payment Commence?
The Job Keeper Payment will be available from 30 March 2020.
How long will the Job Keeper payment last for?
The Job Keeper payment will be available for the period until 27 September 2020.
Employers (including not-for-profits) will be eligible for the subsidy if:
- Their business has a turnover of less than $1 billion (and if part of a group for income tax purposes, the group has a combined turnover of less than $1 billion) and estimate their turnover has fallen or will likely fall by 30 per cent or more; or
- Their business has a turnover of $1 billion or more (or if part of a group for income tax purposes, the group has a combined turnover of $1 billion or more) and estimate their turnover has fallen or will likely fall by 50 per cent or more; or
- Their business is not subject to the Major Bank Levy.
For charities registered with the Australian Charities and Not-for-profits Commission (ACNC), they will be eligible for the subsidy if they estimate their turnover has fallen or will likely fall by 15 per cent or more relative to a comparable period. Job Keeper Payments are paid in respect of each eligible employee who was employed at 1 March 2020 and is currently employed by the business (including those who are stood down or re-hired).
All business types, including not-for-profits, will be eligible with the exception of those listed below. The following entities will not be eligible:
- Australian Government and its agencies,
- State and Territory governments and their agencies,
- Foreign governments and their agencies;
- Local council governments;
- Wholly-owned corporations of any of the above; and
- A business subject to the Major Bank Levy.
Additionally, a company that is in liquidation, or a partnership, trust or sole trader in bankruptcy, will not be eligible.
Some sectors may not be eligible if they are separately provided with support from the Government that explicitly requires them to forgo access to the Job Keeper Payment.
Eligible employers need to determine if they want to participate in this program by electing into it. More details will be provided about how to do that. The Job Keeper Payment will be administered by the ATO. If you want to participate, you can register your interest on the ATO website to keep updated on information about the Job Keeper payment.
If you register you will receive updates and information from the ATO about how and when to claim the Job Keeper payment. If you are a BAS or Tax agent you do not need to register each client separately, unless you are registering each client to receive the information directly.
You will only be able to claim the Job Keeper payment for eligible employees that were in your employment on 1 March 2020, and continue to be employed while you are claiming the Job Keeper payment.
- Is currently employed by the eligible employer (including those stood down or re-hired);
- Is a full-time or part-time employee, or a casual employed on a regular and systematic basis for longer than 12 months as at 1 March 2020;
- Was aged 16 years or older at 1 March 2020;
- Was an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020;
- Was a resident for Australian tax purposes on 1 March 2020; and
- Is not in receipt of a Job Keeper Payment from another employer.
You can only claim Job Keeper payment for eligible employees if you pay the $1,500 per fortnight (before tax) to each eligible employee.
These payments should be made using your payroll system and reported to the ATO via Single Touch Payroll. This will support the online claim process when it is available.
You will be required to advise your employees whether you have nominated them as an eligible employee for the purposes of the payment.
The first payments by the ATO will be received by employers in the first week of May.
The payments will be made by the ATO monthly in arrears.
Employers will need to satisfy payment requirements for their eligible employees in respect of each 14 day period covered by the scheme. The first period starts on Monday 30 March 2020 and ends on Sunday 12 April 2020.
The payment requirement is that they pay their eligible employees a minimum of $1,500 per fortnight in the scheme payment periods. Where an employer pays their staff monthly, the ATO will be able to reallocate payments between periods. However, overall an employee must have received the equivalent of
$1,500 per fortnight.
The final period will start on Monday 14 September 2020 and end on Sunday 27 September 2020.
Yes. You can claim Job Keeper for employees that were stood down after 1 March 2020. To be eligible in relation to these employees, you will need to pay them a minimum of $1,500 per fortnight (before tax) for the payment periods of the Job Keeper Scheme.
The first payment period under the scheme is from 30 March 2020 to 12 April 2020. Where an employer pays their staff monthly the monthly payment must be equivalent to the required fortnightly payment.
For all following payment periods you will need to continue to pay your employees a minimum of $1,500 per fortnight (before tax), before the end of the payment period.
Turnover will be defined according to the current calculation for GST purposes and is reported on Business Activity Statements. It includes all taxable supplies and all GST free supplies but not input taxed supplies. There are some modifications for businesses that are part of a GST group. Further information on GST turnover, and how to calculate it, is available at ato.gov.au.
Under the GST law, only Australian based sales are included and therefore, only Australian based turnover is relevant. A decline in overseas operations will not be counted in the turnover test.
To establish that a business has faced or is likely to face a 30 per cent or more or 50 per cent or more fall in turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or quarter (depending on the Business Activity Statement reporting period of that business) relative to their turnover in a corresponding period a year earlier.
Where a business was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (e.g. because there was a large interim acquisition, they were newly established, were scaling up, or their turnover is typically highly variable), the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been adversely affected by the impacts of the Coronavirus.
The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business ceases or significantly curtails its operations). There will be some tolerance where employers, in good faith, estimate a 30 per cent or more or 50 per cent or more fall in turnover but actually experience a slightly smaller fall.
You can apply for the payment if you reasonably expect that your turnover will fall by 30 per cent or more (or 50 per cent or more for businesses with a turnover of $1 billion or more) relative to your turnover in a corresponding period a year earlier. The ATO will provide guidance about self-assessment of actual and anticipated falls in turnover.
If a business does not meet the turnover test at the start of the Job Keeper scheme on 30 March 2020, the business can start receiving the Job Keeper Payment at a later time once the turnover test has been met. In this case, the Job Keeper Payment is not backdated to the commencement of the scheme. Businesses can receive Job Keeper Payments up to 27 September 2020.
In many cases, your payments and obligations to eligible employees will not change. Your business, if eligible, will receive a $1,500 per fortnight subsidy to support their continued employment. However, if any eligible employee currently earns less than $1,500 before tax per fortnight, you will need to pay them $1,500 per fortnight before tax to receive the Job Keeper payment.
To be able to claim the Job Keeper payment for an eligible employee, that employee must be paid a minimum of $1,500 income per fortnight, before tax is withheld.
If you want to claim the subsidy for an eligible employee and they have not been paid $1,500 per fortnight since 30 March 2020, employers must pay a ‘top-up’ payment to employees so that they are eligible. The ATO will provide further guidance on how this will work.
The employer will be reimbursed $1,500 per fortnight for each eligible employee. Employers cannot pay their employees less than $1,500 per fortnight and be entitled to a payment for that employee.
If the eligible employee is paid more than $1,500 a fortnight before tax, the employer will only be reimbursed $1,500 per fortnight.
Yes. If you want to claim the Job Keeper Payment for your employees you will need to confirm your eligible employees want to be part of the scheme and arrange for them to be paid a minimum of $1,500 per fortnight before tax from 30 March 2020.
Yes. You can receive the payment if you re-hire any eligible employees you had at 1 March 2020. You can receive the payment even if you then need to immediately stand them down, so long as they remain employed.
The Job Keeper Payment is a reimbursement scheme that will be paid by the ATO monthly in arrears. In cases where this may present cash flow difficulties, those businesses may want to speak to their bank to discuss their options. The banks have said businesses may be able to use the upcoming Job Keeper payment as a basis to seek credit in order to pay their employees until the scheme is making its first payments.
If an employee for whom you are receiving the Job Keeper Payment resigns, you must notify the ATO. You may need to refund some money to the ATO.
No. The employee must have been engaged as of 1 March 2020.
Employers must assess whether their casual employees satisfy the test of working for 12 months on a regular and systemic basis. A casual may still meet this condition even if the entity operating the business has changed recently.
Employers must assess whether their employees satisfy the test of working for 12 months on a regular and systematic basis. A casual may still meet this condition even if they were they were transferred from another member of a corporate group within the last 12 months.
If an eligible employee has received a redundancy package and you wish to re-hire them, you will need to consult with the employee and consider prevailing workplace arrangements to settle redundancy terms.
The payment will generally be paid directly to the employer and not used to offset tax liabilities, as the intent is that it is a payment that facilitates employers to pay their employees.
Employees are only eligible in respect of their direct employer.
Employees will not be eligible for the Job Keeper scheme if they are fully incapacitated, unable to work and being supported by a workers compensation scheme. In other cases, employees would be eligible as they are in an employment relationship with their employer, provided their employer has an obligation to pay some component of their salary or wages. If your employee is fully compensated under your workcover insurance, they will be ineligible for the Job Keeper scheme.
The Government is providing a range of support to businesses to address the significant economic consequences of the Coronavirus. The Government is boosting cash flow for employers by providing up to $100,000 to eligible small and medium-sized businesses, and not-for-profits, that employ people, with a minimum payment of $20,000. These payments will help businesses with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
Other measures to support businesses include temporary relief for financially distressed businesses, increasing the instant asset write-off and backing business investment.
Further information on the economic response to the Coronavirus is available on the Treasury website at treasury.gov.au/coronavirus.
Eligible employees are employees who:
- Are currently employed by the eligible employer (including those stood down or re-hired);
- Are a full-time or part-time employee, or a casual employed on a regular and systematic basis for longer than 12 months as at 1 March 2020;
Were aged 16 years or older at 1 March 2020;
- Were an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020;
- Were a resident for Australian tax purposes on 1 March 2020; and
- Are not in receipt of a Job Keeper Payment from another employer.
Eligible employees will receive, at a minimum, $1,500 per fortnight before tax. You will receive a payment from your employer.
No. If you receive $1,500 or more in income per fortnight before tax, you will continue to receive your regular income according to your prevailing workplace arrangements. The Job Keeper Payment will assist your employer to continue operating by subsidising part of your income.
If your employer is eligible for the Job Keeper Payment, and they elect to participate, your employer will receive $1,500 per fortnight for each eligible employee. They will be required to pay you $1,500 (before tax) per fortnight. The payment will be treated as income, and so will have tax withheld by your employer on your behalf.
Yes. The Job Keeper Payment is not income-tested, so you may earn additional income without your payment being affected as long as you are eligible and maintain your employment (including being stood down) with your Job Keeper-eligible employer. However, you can only receive the Job Keeper payment from one employer, your primary employer.
You will be eligible for the Job Keeper Payment if you have been stood down from work, or if your former employer re-hires you. However, the Job Keeper Payment is treated as ordinary income for the purposes of social security payments. You must therefore report your change in circumstances to Services Australia if you are receiving income support, and this is likely to make you ineligible for the Job Seeker Payment or other income support payments or eligible at a reduced rate.
No superannuation guarantee payments are required to be paid on any additional payment made because of the Job Keeper Payment.
No. The Job Keeper Payment supports businesses to maintain eligible employees who were in their employ on 1 March 2020. You may be eligible for the Job Keeper Payment if you are currently stood down by your 1 March 2020 employer or if you are re-hired by that employer.
You are eligible for the payment if you have been with your employer for 12 months at 1 March 2020 on a regular and systematic basis. Apart from this, casual employees are not eligible for the Job Keeper Payment. If you are ineligible for the Job Keeper Payment, you may be able to apply for support through Services Australia depending on your personal circumstances.
Fixed term contractors are eligible for the payment if you were employed at 1 March 2020 and meet the other eligibility criteria for the Job Keeper Payment.
No. Every employee is only able to receive one payment from one employer, their primary employer. Your employers who have elected to participate in the Job Keeper Payment scheme may ask you to indicate whether they are your primary employer. If you are employed by more than one employer, you should contact your employers and indicate to them which is your primary employer.
The ATO will provide guidance on how to determine your primary employer.
You can continue to receive non-Job Keeper supported income from your non-primary employer.
You may still be eligible if you have been working for the business for at least 12 months as at 1 March 2020 on a regular and system basis, even if the entity operating the business has changed recently. Your current employer will need to assess whether you meet this test.
To be eligible for the Job Keeper Payment, an employee must be an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020.
You may be eligible to receive the payment if you are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder who has temporarily left the country. You will be eligible for the payment if you are a resident of Australia for tax purposes and if you have been stood down from work, or if your former employer re-employs you. If you have ceased employment, and are not rehired, you will not be eligible for the payment.
No. Employees must be at least 16 years of age on 1 March 2020 to be eligible.
Yes, unless you are in receipt of Government Paid Parental Leave or Dad and Partner Pay. If you are an eligible employee and your employer is an eligible employer, they will receive the payment whether you are working, on leave, or have been stood down.
If you are not an eligible employee, you may be able to access income support through Services Australia. More information is available on the Services Australia website at servicesaustralia.gov.au/individuals.
If you are still working — such as reduced hours — then you will be eligible to receive the Job Keeper Payment. However, if you are not currently working due to incapacity and you are being supported through workers’ compensation arrangements then you will not be eligible for the Job Keeper Payment.
For the period that you are receiving Parental Leave Pay or Dad and Partner Pay then you will not be eligible for the Job Keeper Payment.
Yes. The Job Keeper payment may be paid to an employee in cash or as a fringe benefit or extra superannuation contribution where the employee and employer agree.
Self-employed and other eligible businesses
Yes. People who are self-employed will be eligible for the payment provided, at the time of applying, they:
- Estimate their turnover has or will fall by 30 per cent or more;
Had an ABN on or before 12 March 2020, and
- Either had an amount included in its assessable income for the 2018-19 year and it was included in their income tax return lodged on or before 12 March 2020 (or such later time as allowed by the Commissioner), or
- Made a supply during the period 1 July 2018 to 12 March 2020 and provided this information to the Commissioner on or before 12 March 2020 (or such later time as allowed by the Commissioner);
- Were actively engaged in the business;
- Are not entitled to another Job Keeper Payment (either a nominated business participant of another business or as an eligible employee);
- Were aged at least 16 years of age as at 1 March 2020; and
- Were an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020.
No. Only one partner can be nominated to receive a Job Keeper Payment along with any eligible employees, noting a partner cannot be an employee.
Trusts can receive Job Keeper payments for any eligible employees. Where beneficiaries of a trust only receive distributions, rather than being paid salary and wages for work done, one individual beneficiary (that is, not a corporate beneficiary) can be nominated to receive the Job Keeper Payment.
An eligible business can nominate only one director to receive the payment, as well as any eligible employees. Only one person in a director capacity may receive the payment and that individual may not receive the payment as an employee.
An eligible business that pays shareholders that provide labour in the form of dividends will only be able to nominate one shareholder to receive the Job Keeper Payment.
No. Only businesses with employees or self-employed people are eligible for the Job Keeper Payment.
The ATO will administer the program with an online application process. You may be asked to provide your ABN and a single Tax File Number for the eligible recipient of the Job Keeper Payment, and a declaration of business activity.
An individual can only receive Job Keeper Payments from one source. However, if you are eligible for a Job Keeper Payment, you can also receive income from other sources including another job.
The Job Keeper Payment is included in adjusted taxable income. Parents should continue to report any change to their income or wages as they normally would. A key principle of the child support scheme is that children are supported by their parents in accordance with their financial capacity to do so.
Eligible small businesses can receive the 50 per cent wage subsidy for apprentices and trainees in the Supporting Apprentices and Trainees measure from 1 January to 31 March 2020, and the Job Keeper Payment. Where small businesses receive the Job Keeper Payment, they are not eligible to receive the apprentice and trainee wage subsidy from 1 April 2020 onwards.
Further information on the Supporting Apprentices and Trainees measure is available on the Treasury website at treasury.gov.au/coronavirus/businesses.
This program will be subject to ATO compliance and audit activities. There will be a positive obligation on employers to establish their eligibility and that of their employees. In addition, the ATO will cross-check payments with Services Australia data, and data from other government agencies, and undertake activities designed to identify multiple or ineligible payments to individuals.
The ATO will provide guidance to help businesses self-assess their eligibility. This will include for circumstances that do not fit neatly into more general circumstances that the majority of businesses are in.
The Government will include appropriate integrity rules to prevent employers from entering into artificial schemes in order to get inappropriate access to payments.
There are serious consequences, including large penalties and possible imprisonment, for those trying to illegally get benefits under the scheme.
Employers must continue to comply with their obligations in the Fair Work Act. The Job Keeper Payment does not remove any workplace protections for employees. Enforcement in relation to Fair Work entitlements will continue to sit with the Fair Work Ombudsman. Enforcement and compliance to ensure the Job Keeper Payment is passed on to employees will be done by the ATO.
This information has been supplied by the Australia Government. If you have any questions about the Job Keeper subsidy, please contact us.