The JobKeeper payment has been set up to help employers and the self-employed keep their doors open and employees to keep working. Are you eligible?

The JobKeeper payment is the new scheme on the minds of employers, employees and the self-employed throughout Australia. They’re wondering, ‘Am I eligible?’ ‘How do I register?’ And, ‘How much is the payment?’

We’ll answer all those questions (and more!) for you here.

What is the JobKeeper payment?

As part of their response to the coronavirus pandemic, the Australian government has passed legislation for a $1,500 per fortnight wage subsidy for eligible entities. This payment is designed to help keep Australians working, whether they’re employees or self-employed, despite the economic impacts of coronavirus. It’s different to the JobSeeker payment which is an $1,100 supplement for those that are out of work.

The government believes that six million Australian workers will benefit from this subsidy before the end of the pandemic.

Who is eligible for the JobKeeper payment?

The government has aimed the JobKeeper payment at all types of Australian workers. This includes the typical employer/employee business, the self-employed and sole traders, charities, not-for-profits, partnerships, trusts and companies with shareholders.

The Employer/Employee Business

If you are part of a business with employees or a not-for-profit or a charity, there is a dual test you must meet in order the access the JobKeeper scheme. In that situation both the employer and the individual employee must be eligible in order for the employees to receive a JobKeeper payment.

Eligible Employers

Eligible employers must meet the following eligibility requirements:

1. Have a turnover of less than $1 billion and have lost more than 30% of their revenue (when compared to the same period a year ago); OR
2. Have a turnover of more than $1 billion and have lost more than 50% of their revenue (when compared to the same period a year ago).
3. If you’re a charity, the revenue loss just needs to be 15%.

Some organisations (and therefore their employees) are just not eligible regardless of whether or not they meet the criteria. This includes the big banks and public sector employers like local government bodies.

Eligible Employees

Even if an employer is eligible, not every one of their employees will be. Employees also have to meet the following eligibility requirements:

• Were employed as of 1 March 2020;
• Are at least 16 years old;
• Are an Australian citizen, or have certain specified types of visas, including permanent and New Zealand 444; and
• If they’re sole traders, full-time, part-time or long-term casuals, they’ve been employed on a regular basis for longer than 12 months as of 1 March 2020.

If you believe you meet the eligibility requirements (or even if you’re not sure, but want to know if you do), you should take the following steps:

• First, contact your employer and let them know you want them to claim the JobKeeper payment for you. If you have more than one job, you must choose only one employer to claim the payment for you (if one is a permanent employer, choose that one) and let your other employers know who you have nominated.
• Second, complete the JobKeeper employee nomination notice and return it to your employer.
• Third, you can’t get the JobKeeper payment if you receive certain other types of payments. For example, if you are also applying for a Services Australia income support payment (like the JobSeeker payment), contact Services Australia. You must let them know that your employer is applying for the JobKeeper payment or you could find yourself in a situation where you owe the government money.

What if I’ve been fired or stood down?

If your employer continues to pay you $1,500 per fortnight before tax, then they may receive the JobKeeper payment. This means that businesses that shut down because of COVID-19 restrictions, like cafes, cinemas and pubs, can re-engage their eligible employees and keep them ‘on the books’ and being paid even while they aren’t working.

How Will You Receive Your Payment?

The JobKeeper payment goes directly to the employer. The employee continues to receive their normal wages from their employer, and the employer is then reimbursed up to $1,500 for those payments.

If an employee is earning less than $1,500 per fortnight, but they’re eligible for the payment, the employer must pay them at least $1,500 in order to receive the JobKeeper payment from the government. That means that in some situations, employees may actually receive more income than their regular pay.

If an employee earns more than $1,500 per fortnight, the JobKeeper payment will subsidise their income up $1,500. The remainder will be paid by their employer as usual.

It’s important to note that employees aren’t receiving a cash payment under this scheme. Instead, it’s a way for the government to help employers to keep their workers on the job despite the hard economic times.

Sole Traders, Partnerships, Trusts and Companies

Sole traders, partnerships, trusts and companies may also be entitled to receive JobKeeper payments. To be eligible, the entity must:

1. Have carried on a business in Australia on 1 March 2020;
2. Had an ABN on 12 March;
3. Lodged a 2018–19 income tax return, or an activity statement or GST return for any period that started after 1 July 2018 and ended before 12 March 2020 on or before on or before 12 March;
4. Met the 30% business revenue reduction test; and
5. Have someone actively engaged in the business of the entity (this is called the ‘eligible business participant’) who is not an employee of the entity.

The entity must nominate the eligible business participant. This would be the partner in a partnership, the beneficiaries of a trust or the shareholders or directors of a company. However, the sole trader may be their own eligible business participant and may nominate themselves.

There is no wage condition attached to the JobKeeper payments to sole traders, trusts, companies or partnerships. In other words, there’s no requirement that these entities have paid $1,500 per fortnight to the eligible business participant. And the JobKeeper payments you receive do not have to be distributed to an eligible business participant. Instead the money becomes part of the taxable income of the entity to do with as they choose.

When Will JobKeeper Payments Be Made?

The subsidy will start on 30 March 2020, so payments will start being received in the first week of May. Businesses should register their interest and can enrol for the JobKeeper payment on or after 20 April 2020 on the ATO website.  

More Questions?

There are always situations that don’t completely fit into the categories set out above. But the ATO is keen to help as many businesses as possible. If you’re unsure whether you’re eligible, or if your situation is unique, give the ATO a call directly. They’re ready and taking calls now.

Of course, we’re happy to answer any questions here at Dart Accounting as well. The JobKeeper scheme seems complicated, but hopefully it will go some way to helping employees keep their jobs and employers keep their businesses afloat.

We’re happy to give you personalised advice about your eligibility for the JobKeeper payment. Get in touch for your free one hour initial consultation call.