All about JobKeeper

Yesterday evening (Wednesday 8 March 2020), both houses of federal parliament passed the Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 and the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020. Within the Payments and Benefits Bill is the JobKeeper Payments announced on 30 March 2020. These payments are intended to support businesses to keep more workers in jobs throughout the course of Coronavirus. We have prepared responses to a common range of questions asked by employers.

When should my business begin making JobKeeper Payments?

Your business will need to satisfy payment requirements for eligible employees in respect of each 14-day period. The first period is Monday 30 March and ends on Sunday 12 April 2020. JobKeeper Payments can be made to employees from 30 March 2020. Treasury has made it clear that there is a requirement for businesses to pay their eligible employees a minimum of $1,500 per fortnight in the scheme payment periods to be entitled to the subsidy payments once they commence in the first week of May 2020.

How do I setup the payment in my accounting or payroll system?

It is strongly recommended that you setup a separate payroll item or category in your payroll system and call it ‘JobKeeper’. Ensure you have the new item set to withhold PAYG and you have an option whether or not to accrue Superannuation Guarantee (SG).

How do I assess that my turnover has fallen 30 or 50 per cent?

To establish a decline in turnover, compare the relevant month or quarter (i.e., March Quarter 2020 or the month of March 2020), with the relevant month or quarter a year earlier (ie., March Quarter 2019 or the month of March 2019).

My business is still operating and my employees are still working

Your businesses should continue to pay employees as they would have been prior to the impacts of Coronavirus. You business, if eligible, will receive a $1,500 per fortnight subsidy to support their employment. However, if an employee is earning less than $1,500 per fortnight (due to their existing work arrangements, or as a result of being directed to work reduced hours), then it is important to pay the employee a minimum of $1,500 per fortnight to be eligible for JobKeeper.

What if I pay my employees less than $1,500 per fortnight?

If you want to claim the subsidy for an eligible employee and they have not been paid $1,500 per fortnight since 30 March 2020, you must pay a ‘top-up’ payment to employees so that they are eligible. Your business will not be entitled to a JobKeeper Payment for that employee if they pay less than $1,500 per fortnight. 

What happens if I don’t have the money to pay eligible employees?

If your business is experiencing cash flow challenges and is not able to pay JobKeeper, it is recommended your business seek alternative sources of funding, including short-term lending. The banks will consider the JobKeeper payment as a basis to seek credit so that your business can pay employees ahead of receiving the first subsidies.

What if my business was not in operation a year earlier?

Where your business was not in operation a year earlier, the Tax Commissioner will have discretion to consider additional information that the business will need to provide to establish that it has been adversely impacted by Coronavirus.

What if I stood down my employees after 1 March 2020 and no longer payment them? Do I need to pay them?

You can claim JobKeeper for employees that were stood down after 1 March 2020. To be eligible in relation to these employees, you will need to pay them a minimum of $1,500 per fortnight for the payments periods of JobKeeper – 30 March 2020 to 27 September 2020. 

How does JobKeeper work with the Fair Work Act?

Certain changes have been legislated into the Fair Work Act that provide increased flexibility around employees’ hours of work via a new JobKeeper enabling stand down direction, performance of duties and location of work. It enables employers and employees to make agreements for increase flexibility around annual leave arrangements and days and times of work. We would encourage businesses to get in touch with either employment law advisors or solicitor for further information and guidance on the details of the new changes.

If you have additional questions or your business requires additional assistance to administer JobKeeper, please call us on 1300 936 632.