COVID-19: Third Stimulus Package – JobKeeper
Yesterday afternoon (30/3/2020) the Government announced the Third Economic Stimulus Package which included wage support for businesses and their employees impacted by a downturn in business or forced to close due to COVID-19. The Package is not yet LAW! It is likely to become law but nothing is certain about the detail or the way this will work until the law is passed.
Provides $1500 per fortnight from the government (paid by the ATO) per impacted employee for up to 6 months. This includes:
Those stood down, terminated or decreased hours
Full time or part time
Casuals who have been with the business for more than 12 months are included
It also applies to sole traders, meaning for those in business for themselves and business has declined, then the government will support them through JobKeeper and not require the contact with Centrelink for the other program. Administration and application details are not yet known.
The Proposed Package:
Money will begin to be received from 01/05/2020
There will be an amount of backpay for the fortnights between 30/3/2020 and 1/5/2020
Then it will continue to pay up to $1500 per fortnight per employee and then ongoing for up to 6 months
If an employee would normally earn less than $1500 per fortnight then they will now be paid $1500 during this time, paid by the government for the employer to pass on. If they earnt more than $1500 per fortnight this provides $1500 to pass on, through payroll. Any amount above $1500 is determined by the employer.
The amount paid is taxable but does not incur Superannuation Guarantee if employees are not working any hours. If they are performing any work for the business Superannuation Guarantee will have to be paid as per standard rules. (Further details are still to be confirmed).
Eligible employees will receive, at minimum, $1500 per fortnight that is taxed (normally at $192) therefore a net $1,308. We do not yet know the impact of this program on annual leave accrual etc nor the impact on those employees you have already terminated. We understand that Government is looking at considering it simply as a re-employment of those that have been previously terminated.
The program means you will receive money from the Government and pay it to the impacted employees through payroll, as if their employment was continuing as per normal. This is proposed to replace employee involvement in the JobSeeker program with Centrelink.
The intention of the government is to provide this to employers to permit the business to evaluate the ability to keep the business running in some form or as part of plans to re-open the doors.
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 has fallen by more than 30% (of at least a month); or
Their business has a turnover of $1 billion or more and their turnover has fallen by more than 50% (of at least a month); and
The business is not subject to the Major Bank Levy
We understand that you have lots of questions, especially if you have already stood-down staff or have made staff redundant. Please be assured that we will provide further information as it becomes available. At present we are just waiting for the ATO to announce any further updates on this.
Thank you for your patience and ongoing support.
Joanne, Tricia & Therese The Three Bookkeeping & Admin Services