Prime Minister Scott Morrison announced a $130 billion support package to assist employers and employees. The logic behind these measures is to assist employers and keep their employees and have them working where they can. However, if there is no work due to Coronavirus related closures, then these employers can retain their employees on this payment for up to six months so employees stay with their employers.
Critical to the payment scheme is the need for employers to register their interest in the scheme via the ATO website.
The key points are summarised below:
- There will be a $1,500 per fortnight Job Keepers Payment.
- The $1,500 needs to go to each eligible employee even if the amount is greater than their actual wages.
- An individual cannot receive the Job Seekers Payment as well as the Job Keepers Payment and this is a flat rate for everyone.
- This applies to full time workers, part time workers, sole traders and casual employees that have been with their employer for more than 12 months.
- Any employee that has been stood down from 1 March 2020 can be eligible for these payments.
- Payments will be made from 1 May 2020 onwards, however, they will be backdated to yesterday, 30 March 2020.
- Employers can start making these payments as of yesterday from their own funds, and will be reimbursed back to yesterday’s date.
- Every business (turnover less than $1 billion) will be eligible where they have/will see a decrease in turnover of 30% of more. It only needs to be relative to a comparable period a year ago and only needs to be for 1 month minimum. The period can be an actual period e.g. March 2019 or projections (reasonable and arguable basis) for a future month e.g. April 2019.
- Employers must register with the Tax Office to receive these payments (businesses can do this themselves directly on the ATO website, there is further detail on the attached Treasury fact sheet and you can contact Capitis re any queries or for assistance.
- The ATO will have a registration button on their website ato.gov.au shortly
- The Single Touch Payroll system (STP) will be used to process payments to employees.
- This is proposed to be a scheme that lasts for up to six months.
- If an employee continues to be employed and is working then have to pay 9.5% super on the wages earned e.g. if wages are $1,000 for hours worked then the employer has to pay super on this amount but don’t have to on the additional $500.
- If employee continues to be employed and working full time and wages are $1,700 the employer then has to pay super on the full $1,700. (employer receives $1,500 as subsidy for the employees’ wages).
- If employee is not working any hours but getting payment then the employer does not have to pay super on the full $1,500.
Note: Please note care has been taken to provide accurate, current information, but please also consult your accountant and the ATO.