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The Prime Minister yesterday announced a further $130 billion economic package aimed at preserving jobs. Please be aware this is not yet legislated and like the stimulus payments, once we saw the legislation, there were a number of issues identified in the legislation.  More details can be found here: Fact Sheet from Treasury: Information for Employers 

What you need to know about the “Job Keeper” payment as it stands today:

  • The payment is available to businesses who have suffered a financial decline as a result of the coronavirus.  This is currently defined as a 30% reduction in turnover from a comparable period a year ago of at least a month, for entities with turnover less than $1 billion;

  • The payment is $1500 (before tax) per employee per fortnight – at the announcement it was stated that all employees will receive $1500 regardless of what their usual earnings are;

  • The payment will be made to eligible employees on the books at 1 March 2020 via their employer who will receive it from the ATO;

  • The payment is for a period of up to six months;

  • The program will commence today, 30th March 2020, with first payments to be received in the first week of May;

  • Full time and part time employees who are “currently engaged”, including stood down employees and employees who are rehired, would be eligible to receive the JobKeeper Payment;

  • Where a casual employee has been with their employer for at least the previous 12 months they will also be eligible for the Payment.

  • An employee will only be eligible to receive this payment from one employer;

  • Eligible employers include businesses structured through companies, partnerships, trusts, sole traders, not-for-profit entities (including charities);

  • New Zealanders on the 444 visa will be included;

  • All other temporary visa holders may not although conversations are “under way;”

  • The system will be implemented through the current Single Touch Payroll system.

  • Self-employed individuals are also eligible to apply.

Overall, we are very pleased with the scheme and it will be of immense assistance to a number of small businesses.  However, please note, some of the questions we are already receiving regarding implementing these arrangements include:

  1. How do you calculate the 30% decline? For example, if you have a retail shop which is closed but an online store which is still selling can you apply for the 30% decline just to the store?

  1. What do the words “currently engaged” mean?  Does it mean the worker has to come back to work, or do some work from home or can they stay at home and not work?  What if your business is completely shut and workers can’t work from home – eg gyms, clubs, certain medical etc?  How do you “re-engage” them?

  1. For part-time and casual staff who don’t currently earn $1,500 net per fortnight – it appears that you actually need to increase their salary on your payroll.

  1.  For those staff currently earning more than $1,500 net per fortnight, do you continue to pay the gap between the $1,500 and normal salaries?

  1. Do you continue to pay superannuation? There appears to be a choice, on certain payments, but it is very unclear?

  1. What is the cost of continuing to run a payroll if your business is completely shut and has no revenue?

  1.  If you have already maxed your entitlement to the previously announced $100k stimulus for tax on wages, will you need to pay PAYG tax on the wages? It appears so.

  1. Managing your cashflow between now and 1 May 2020.

  2. Assuming leave entitlements continue to accrue and if you need to make these employees redundant in the future, how does this work?

10. Can you adopt this arrangement for some employees but not all employees?

Please be patient as we work through this with all our clients. It will impact each business differently. We are in the process of booking phone/video calls with you to work this through.

Important Steps to Take Now:

  1. If you believe you are eligible, please register on-line at the following link: https://www.ato.gov.au/general/gen/JobKeeper-payment/?=redirected_JobKeeper.
  2. We have provided a Sample Letter For Employers to deliver to your employees as an interim measure.

Please do not hesitate to contact us to discuss further.

 

Date Published: 30 March 2020

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