JobKeeper Payment – Third Economic Response Package to the Coronavirus | McSweeney CA | Consulting Accountants
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JobKeeper Payment – Third Economic Response Package to the Coronavirus

Yesterday the Australian Government announced a third economic response package, the JobKeeper Payment.

Businesses significantly impacted by the coronavirus outbreak will be able to access a subsidy from the Government to continue paying their employees. This assistance will help businesses to keep people in their jobs and re-start when the crisis is over. For employees, this means they can keep their job and earn an income – even if their hours have been cut.

What is the JobKeeper Payment?

The JobKeeper Payment is a temporary scheme open to businesses impacted by the coronavirus. The JobKeeper Payment will also be available to the self-employed (sole traders).

The Government will provide $1,500 per fortnight per employee for up to 6 months. The Government will commence making payments from the first week of May (backdated to 30 march 2020).

The JobKeeper Payment will support employers to maintain their connection to their employees. These connections will enable business to reactivate their operations quickly, without having to rehire staff when the crisis is over.

Eligible Employers

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.

The employer must have been in an employment relationship with eligible employees as at 1 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 (sole trader businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.

Eligible Employees

Eligible employees are employees who:
• are currently employed by the eligible employer (including those stood down or re-hired);
• were employed by the employer at 1 March 2020;
• are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
• are at least 16 years of age;
• are an Australian citizen, the holder of a 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;
• are not in receipt of a JobKeeper Payment from another employer.

If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.

How to Apply

Business with employees:
Register your interest in applying for the JobKeeper Payment via The Australian Taxation Office (ATO) from 30 March 2020 – click here to register
• Subsequently, eligible employers will be able to apply for the scheme by means of an online application. The first payment will be received by employers from the ATO in the first week of May.

Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO.

Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.

Businesses without employees (sole traders):
Register your interest in applying for the JobKeeper Payment via The Australian Taxation Office (ATO) from 30 March 2020 – click here to register
• 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.

What if Employees are Stood Down?

So long as the employee was employed by the business at 1 March 2020, the business can receive the $1,500 per fortnight payment and pass this on to each employee for up to six months. This enables the business to maintain a connection to its employees and be in a position to resume operations when the crisis is over.

Please ensure you contact our office to discuss your particular circumstances.

We are always here to help!

McSweeney CA

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