JobKeeper legislation for COVID-19
Federal Parliament last night approved the Government’s $130 billion JobKeeper legislation.
Payments will be made to employers for up to six months during the coronavirus-fuelled economic downturn, starting from next month.
What is the JobKeeper wage subsidy?
The JobKeeper Payment is a temporary scheme open to businesses impacted by the Coronavirus.
Under the JobKeeper Payment, businesses (including self-employed) and not-for-profits significantly impacted by the Coronavirus outbreak will be able to access a wage subsidy from the Government to continue paying their employees. This assistance will help businesses to keep people in their jobs and re-start when the crisis is over.
The Government will provide $1,500 per fortnight per employee for up to 6 months. This payment will support employers to maintain their connection to their employees, enabling businesses to reactivate their operations quickly — without having to rehire staff — when the crisis is over.
Who is eligible for JobKeeper payments?
Employers (including not-for-profits) will be eligible for the subsidy if, at the time of applying:
their business has an annual turnover of less than $1 billion and they estimate their turnover has fallen or will likely fall by 30 per cent or more; or
their business has an annual turnover of $1 billion or more (or is part of a consolidated group for income tax purposes with turnover of $1 billion or more) and they estimate their turnover has fallen or will likely fall by 50 per cent or more; and
their business is not subject to the Major Bank Levy.
Self-employed individuals will be eligible to receive the JobKeeper Payment where they meet the relevant turnover test outlined above.
For charities registered with the Australian Charities and Not-For-Profit Commission (ACNC), they will be eligible for the subsidy if they estimate their turnover has or will likely fall by 15 per cent or more relative to a comparable period.
The Australian Government and its agencies, State and Territory governments and their agencies, foreign governments and their agencies, local governments and wholly-owned corporations of these bodies are not eligible for the JobKeeper payment. Non-government schools and private vocational education providers are eligible.
To establish that a business or not-for profit has faced or is likely to face the relevant fall in turnover, most would be expected to establish that their turnover has or will likely fall in the relevant month or quarter (depending on their Business Activity Statement reporting period) relative to their turnover in a corresponding period a year earlier. Turnover is calculated as it is for GST purposes, and is reported on Business Activity Statements.
Where a business or not-for-profit was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (for example, because there was a large interim acquisition, they were newly established, were scaling up, or their turnover is typically highly variable), the Tax Commissioner will have discretion to consider additional information that the business or not-for-profit can provide to establish that they have been adversely affected by the impacts of the Coronavirus. Businesses that are in liquidation are not eligible for this payment.
Which employees are eligible to receive JobKeeper payments?
Eligible employers will receive the payment for each eligible employee that was on their books on 1 March 2020 and continues to be engaged by that employer — including full-time, part-time, long-term casuals and stood down employees.
Casual employees eligible for the JobKeeper Payment are those employees who have been with their employer on a regular and systematic basis for at least the previous 12 months as at 1 March 2020.
To be eligible, an employee must be an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder as at 1 March 2020. The employee must also be a resident for Australian tax purposes on 1 March 2020.
Employees receiving Parental Leave Pay from Services Australia are not eligible for the JobKeeper Payment. However, employees on parental leave from their employer will be eligible. Employees receiving workers compensation will be eligible for the JobKeeper Payment if they are working, for example on reduced hours, but will generally not be eligible if they are not working.
Eligible employers who have stood down their employees before the commencement of this scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will be eligible.
Where an employee is accessing support though Services Australia and the employer will be eligible for the JobKeeper Payment, the employee should advise Services Australia of their change in circumstances online at my.gov.au or by telephone.
When will payments be made?
The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May.
Further resources
The following information is available from Treasury which gives you details on JobKeeper:
Register here to stay informed of any latest announcements regarding this scheme by the ATO.
Fair Work Act - dramatic changes for employers and employees on JobKeeper Wage Subsidy during COVID-19 pandemic.
In conjunction with the JobKeeper legislation, the Government has passed a number of changes to the Fair Work Act for employers and employees who receive the Jobkeeper Subsidy. A summary of these changes has been provided by Australian Business Lawyers and Advisors.
The Government has changed the Fair Work Act for employers and employees who have accessed the JobKeeper wage subsidiary (and only for these employers and employees).
The new laws override any modern award, enterprise agreement or employment contract.
Under the new laws an employer can:
Stand down an employee without pay (completely or partially) for any period that they cannot be usefully employed.
Change employment arrangements (such as what they do, where they work and when they work) for a specific employee.
It is complicated. For simplicity, we have identified the key questions as follows:
What is the JobKeeper wage subsidy?
What are the new stand down provisions?
What are the workforce flexibilities an employer can use by direction?
Do any other tests apply to giving a JobKeeper direction?
What are the workforce flexibilities an employer can use by request and agreement?
What are the consultation obligations?
Additional FAQs