Tax & Accounting Blog

$130 billion lifeline for businesses to keep workers

Accounting, Blog, Federal Tax, Governments, News March 30, 2020

By Virginia Ginnane, Marketing Content Specialist, Thomson Reuters

In the third and largest economic stimulus package the Federal Government has announced a JobKeeper Payment to help eligible employers retain their staff during the Coronavirus crisis.

 
The massive wages subsidy will mean around 6 million workers will receive a fortnightly payment of $1,500 (before tax) through their employer.

In announcing the support on 30 March 2020, the Prime Minister said that employers will be able to claim the payment for each employee from that date, for a maximum of six months.

Employers, under a legal obligation to pass on the full subsidy to employees, will notify their staff if they intend to claim the fortnightly payment on their behalf.


Subsidy conditions

The JobKeeper Payment will be made for each eligible employee that was on their employer’s books on 1 March 2020 and is still engaged by that employer – including full-time, part-time, long-term casuals and employees.

Eligible casual employees need to have been with their employer on a regular basis for at least the previous 12 months as at 1 March 2020.

The payment will be backdated to include anyone who has been stood down due to Coronavirus.

The Prime Minister said that the situation would be more complex for anyone who had already been retrenched.


Employer criteria

Employers (including non-for-profits) 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
  • 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
  • is not subject to the Major Bank Levy.


JobSeeker eligibility extended

Further changes to the income test for people on the JobSeeker payment were also announced, extending eligibility to those whose partners earn almost $80,000 a year.

The Government recently doubled the JobSeeker payment, previously called Newstart, to $1,100 a fortnight. However, a worker cannot get both the JobSeeker and JobKeeper payments.


ATO to oversee

The Australian Tax Office will oversee the payment and has established a website for companies to register interest in the JobKeeper program.

After passing more than $84 billion in stimulus measures on 23 March 2020, Parliament will be recalled to legislate for the JobKeeper payment.