Coronovirus JobKeeper Payment Package Unpacked

Coronovirus JobKeeper Payment Package Unpacked

Today, the Coronovirus JobKeeper Payment Package is due to be passed in Federal Parliament. Worth $130 Billion, it is anticipated that 6 million people – or half the working population – will benefit from this package.

The aim of this subsidy package is to help employers stay in business and keep their staff.

More importantly, the JobKeeper Payment provides welcome relief to sole traders and self-employed people who were previously disadvantaged by the initial subsidy packages.

So, to make it easy for you, Veromo has unpacked the Coronavirus JobKeeper Payment Package for you further. Hopefully we can provide clarity around how you, as a small business, can benefit from it.

What is the JobKeeper Payment?

In a nutshell, it is a wages subsidy for businesses whose turnover has been affected by the Coronovirus Pandemic and are having to consider laying off staff.

According to Kate Carnell, the small business and enterprise ombudsman, the JobKeeper Payment will play a “crucial role” in supporting small businesses during these stressful times.

What is this subsidy and when will it available?

It consists of a fortnightly payment of $1,500(before tax), per employee, subject to the meeting of specific eligibility criteria. Both employers and employees will need to comply and be approved.

If approved, payments will be made available for a 6 month period, from 30 March 2020 until 27 September 2020.

What are the eligibility criteria for businesses?

Most business types – including companies, partnerships, trusts, sole traders and not-for-profits – will be eligible for this subsidy if they can prove or estimate that their turnover has declined relative to a comparable period a year ago.

Businesses can apply for the JobKeeper Payment subsidy if they can prove that:

  • Turnover is less than $1 billion and has fallen or is estimated to fall by 30 per cent or more;
  • Turnover is $1 billion or more and has fallen or is estimated to fall by 50 per cent or more;
  • They are a Charity registered with the Australian Charities and Not-for-profits Commission (ACNC), and can estimate their turnover has fallen or is estimated to fall by 15% or more
  • They are not subject to the Major Bank Levy

A business in insolvency is not eligible to apply.

Some sectors may not be eligible if the Government is providing support that explicitly requires them to forgo access to the JobKeeper Payment.

Which Employees are eligible?

JobKeeper Payments will be paid in respect of each eligible employee who was employed at 1 March 2020 and is currently employed by the business. People who have been stood down or re-hired are included.  To get this subsidy, businesses will have to pay eligible employees at least $1,500 per fortnight (before tax).

Employees are eligible if it can be proved that as at 1 March 2020, they are:

  • A full-time or part-time employee, or a casual who has been employed on a regular and systematic basis for longer than 12 months;
  • 16 years or older;
  • Was an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder;
  • Resident for Australian tax purposes; and
  • Not in receipt of a JobKeeper Payment from another employer.

How will the JobKeeper Subsidy be Paid out?

The Australian Tax Office(ATO) will make payments in arrears directly to the business, starting from the first week in May. To qualify for this payment, all business are required to provide the ATO with their ABN number, their employee’s Tax File Number and their supporting business activity statements(BAS).

How can I participate?

To access the JobKeeper Payment subsidy, businesses will need to register interest via the ATO website. Once registered, the ATO will keep you updated.