Job Keeper & Job Seeker Payments

Summary
As you may already know, yesterday ( 30th March, 2020); the Australian Government announced that 6 million people will now be able to access a $1500 per fortnight wage subsidy.

“We will pay employers to pay their employees,” Mr Morrison said. The Job Keeper payment will be delivered through the Australian Tax Office.

There will be a legal obligation on employers to ensure they passed the full wage subsidy onto employees.

The payment will be a flat-rate of $1500 a fortnight to keep workers on the books regardless of their salary.

If an employee has been stood down, their employer must pay their employees, at a minimum, $1,500 per fortnight, before tax. This means that employees of businesses that shut down due to various restrictions – such as cafes, restaurants, theatres, casino workers and the like – will continue to be paid even if they are not working.

If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer; the employee will also receive, at a minimum, $1,500 per fortnight, before tax.

Treasurer Josh Frydenberg said this payment “changes the equation” and he expects employers who were forced to lay off workers may now “put them back on the books”.

Eligibility of businesses

  • Employees who have already been stood down will be eligible for the payment. ( see above ).
  • If you are an employer with an annual turnover of less than 1 billion, who has experienced a 30% fall in revenue since March 1st, 2020; you will be eligible for this wage subsidy.
  • You will also be eligible if you have a turnover of $1bn or more and with at least a 50% reduction in revenue compared to a comparable period a year ago.
  • Those employers who have already laid off workers will also be able to rehire employees and access the payment. The situation would be more complex for anyone who had already been retrenched, the Prime Minister warned. “There would be the issue that if they have paid out any entitlements under [their enterprise] arrangement … that would have to be sorted out, obviously, with the employer,” he said.
  • New Zealanders and casuals working for more than one year will also be eligible for the payment.
  • Sole traders, self-employed people, partnerships and trusts will also be eligible.
  • You must have been employed by an eligible employer at 1 March 2020.
  • You must at least 16 years of age.
  • Casual workers are eligible only if they have been with their employer for 12 months or more. It is thought that approx. 950,000 casual workers will be ineligible, because they have been with their most recent employer for less than 12 months, something common among casual workers. Most are employed in the accommodation and food services, retail trade, and health care and social assistance industries. More than half are women.
  • Are an Australian citizen, a holder of a permanent visa, a protected special category visa, a non-protected special category visa who has been residing continuously in Australia for 10 years or more, or a New Zealander on a special category (subclass 444) visa.
  • Asked if there would be other exceptions – such as for Pacific workers on temporary visas – Prime Minister Scott Morrison said that some others “are under consideration but for now the short answer to that is no”. (So eligibility may be expanded to others, but at the moment many temporary visa holders will be ineligible).

 

Eligibility of Employees

  • Employees who have already been stood down will be eligible for the payment. ( see above ).
  • New Zealanders and casuals working for more than one year will also be eligible for the payment.
  • You must have been employed by an eligible employer at 1 March 2020.
  • Can be sole traders, full-time, part-time, or long-term casuals employed on a regular basis for longer than 12 months as at 1 March 2020.
  • You must at least 16 years of age.
  • Are an Australian citizen, a holder of a permanent visa, a protected special category visa, a non-protected special category visa who has been residing continuously in Australia for 10 years or more, or a New Zealander on a special category (subclass 444) visa.
  • Asked if there would be other exceptions – such as for Pacific workers on temporary visas – Prime Minister Scott Morrison said that some others “are under consideration but for now the short answer to that is no”. (So eligibility may be expanded to others, but at the moment many temporary visa holders will be ineligible).

 

Date of payments

Mr Morrison confirmed the payment would be delivered in the first week of May but backdated to March 30th, 2020.

How payments will be received

  • The payments are not automatic. Employers must apply to the ATO to receive these payments. Payments will be administered through the single touch payroll system, requiring businesses to keep the worker employed in order to distribute the payment.

 

What about superannuation?

  • Employers must continue to pay the superannuation guarantee on regular wages.
  • It is up to employers whether they pay superannuation on additional job keeper payments. For example, a worker who ordinarily receives $1,000 a fortnight plus superannuation will receive the $1,500 JobKeeper payment, with superannuation paid on the first $1,000 and the employer able to decide whether to pay it on the last $500.

 

Example

Mandy owns a restaurant. She was about to consider letting an employee (Sarah) go due to significant loss of income. Thanks to the new measures she will be able to keep Sarah on. Sarah earns $1700 per fortnight. Therefore, Mandy’s business will get reimbursed $1500 per fortnight ( back dated to 30 March but paid from 1st week of May ) on Sarah’s salary. She will effectively be out of pocket by $200 per fortnight from 30 March, 2020. Mandy will be liable for 9.5% super on Sarah’s wage.

Further Information

 

Job Seeker Payment

  • Since 20 March 2020, the JobSeeker Payment is the main income support payment paid to recipients aged between 22 years to Age Pension qualification age who are looking for work, who temporarily cannot work or study because of an injury or illness, or bereaved partners in the period immediately following the death of their partners.
  • The eligibility for this payment has been expanded. Under the new changes, people will be eligible for job-seeker payments unless their partner earns $79,762 or more (previously this was $48,000). This will help those who have lost jobs but have a spouse still working to access the Job Seeker Package announced last week.
  • If you have applied for the job seeker payment prior to your employer offering to put you back on payroll (in order to access this payment); you need to update services Australia of your new income.
  • If you get the Job Seeker Payment, you cannot get the Job Keeper Payment.
  • To apply for the Job Seeker Payment, you would require prior your prior year financial statements and a year-to-date profit and loss statement.

 

FAQ:
Q: I was working as a sole trader from Jan – March 2020 and I had to stop running my business due to a significant drop in income. Should I apply for the Job Seeker ( +corona virus supplement ) or, should I apply for the Job Keeper Supplements?

A: Register for both. The assistant treasurer said last night on Q and A that they will pay whatever is greater or whichever applies. The administration is up to them.

 

Conclusion

This $130 billion package is designed to support the wages of up to 6 million Australian throughout the coronavirus crisis and to keep Australians in work. It is thought that the Job Keeper Payment will run for at least 6 months. The idea behind the payment is that once the economy does open back up, employees who may have been stood down are immediately available to return to their jobs. Please note that we will be able to confirm the details of this package more specifically once the legislation has been passed. We expect this will occur within 1-2 weeks

17 Comments

  1. This is great info, thanks. Can I ask a few questions? If a director/owner is on a wage, can they also receive the job keeper subsidy?

  2. Lisa Hewitt says:

    Unfortunately, Sole Traders that have been in business less than 12 months arent eligible. Then if any of them are on the NEIS Program it is an even more grey area and it is very scary.

  3. gary says:

    if I take the job keeper payment as I am a casual worker will the 1500 dollars effect my wifes job seeker payment ?

    • Hi Gary, the Job Keeper Payment is not spouse means tested so it would not impact your wife being on the Job Seeker Payment.

    • ROBYN CARLSON says:

      I reported my job keeper payment to centerlink today and they reduced by husbands job seeker payment to $148pfn and he didn’t get the extra $550 supplement. lay at centerlink told me from now on if I receive Job keeper he will only receive $148 job seeker payment plus the $550 supplement. When i questioned the $79000 increase earnings limit they told me that the government is being very generous and the $148 in staedd of $521 still stands. I don’t know what to think

      • Hi Robyn,
        Thanks for your comment.
        Whist the Job Keeper payment is not spouse means tested ( ie your partner can earn any amount of money and you can still receive it ) – the Job Seeker payment is.
        What this means is that if for some reason your spouse earns more with Job Keeper then they did previously – then yes this could impact the Job Seeker payment.
        Please fee to email our team with any further queries that you might have.

      • Hi Robyn,
        Thanks for your comment.
        Whist the Job Keeper payment is not spouse means tested ( ie your partner can earn any amount of money and you can still receive it ) – the Job Seeker payment is.
        Please fee to email our team with any further queries that you might have.

  4. mark hurst says:

    Hi, If as an employer I put staff back on that were stood down for say $ 600 per fortnight do I start paying them the full $ 1500 or waite till 1st of may?

    • Hi Mark, Thanks for your question. We really need to wait for the legislation to pass (expected this Wednesday) to be able to answer you however ( once it passes ) the answer should be that you can re-hire, pay them the money out of your cash flow, and then in the first week of May, you would be back paid until 30 March. Should you have any further queries, don’t hesitate to ask anytime.

  5. holly donald says:

    if I have a claim in process for job seeker, and hypothetically my employer offers the job keeper payment, can I refuse job keeper?

    • Hi Claire,
      Yes. Technically you should be able to refuse this however please note that doing so could impact your Family Tax Benefit and other arrangements such as Child Support.
      Please book a call with a member of our team if you would like to discuss this further.
      Here is the link to book:
      https://calendly.com/sarahruthclayton

      Kind Regards,

  6. paula says:

    Hi im just wanting to know if you apply for the jobseeker payment and it goes through, then your job can claim the jobkeeper payment and they can it goes through for the business what is the next step to do. Do you let centerlink know you can get the jobkeeper payment and stop the jobseeker payments? also do you have to pay the money back that you received from the jobseeker?

    • Hi Paula, we believe you report your income to Centrelink and that will then adjust jobseeker. We do suggest you ring Centrelink and let them know.
      Many thanks for your query.

      Further Info:
      What to do if you’re receiving the JobSeeker Payment
      If you’re receiving a Services Australia income support payment, like the JobSeeker Payment, and your employer has notified you that they are receiving the JobKeeper Payment, you must report that income to Services Australia.
      You may also need to cancel your JobSeeker Payment. If you do not report the income or cancel your JobSeeker Payment, you may incur a debt that you will be required to pay back.
      You can withdraw your claim or cancel your payment using your Centrelink online account through myGov or the Express Plus Centrelink app.

  7. ROBYN CARLSON says:

    i have been told by centerlink that because I receive the $1500 job keeper payment my partners job seeker will be reduced from $521pfn to $148pfn plus the $550 Corona supplememt. even though i am earning under the $79000 per year. There is nothing written anywhere that they say the limit of $79000 earnings is on a pro rata basis effecting my partners job seeker payment. Orginally told he would receive $1071 pfn now only receiving $148 plus $550 = $698pfn

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