The largest element of the COVID-19 economic support package has passed through parliament with the $130 billion JobKeeper Payment designed to save millions of Australian jobs.
The package, first announced last month, was supported by both sides of politics and will help thousands of Australian businesses suffering from the impact of COVID-19.
How it works:
Employers eligible for the JobKeeper Payment will be paid $1,500 per fortnight (pre-tax) per eligible employee from 30 March 2020 for a maximum of six months.
For employers to be eligible for the payments, they must meet the following criteria:
- Business turnover is less than $1 billion, and revenue has decreased by at least 30% compared to a comparable period a year ago.
- If the business’s turnover exceeds $1 billion, revenue must have dropped by 50% from the previous year.
For employees to be eligible for payments, they must meet the following criteria:
- Employed with the business on 1 March 2020.
- Full-time, part-time, or long-term casuals employed regularly for longer than 12 months as of 1 March 2020.
- At least 16 years of age.
- Are an Australian citizen, the holder of a permanent visa, a protected special category visa, a non-protected special category visa who has been residing continually in Australia for 10 years or more, or a New Zealander on a special category (subclass 444) visa.
Sole traders and the self-employed are also eligible to receive the JobKeeper payments. Applicants will need to make a declaration that their businesses’ turnover has been significantly reduced or that their business has been suspended.
What it means for small businesses
The payment scheme is designed to help eligible small businesses retain employees. The government will hand out fortnightly payments to one employer per business, who is required to pass the payment onto the employee. Employees will get taxed on these payments but they won’t receive superannuation contributions for the payments.
If there isn’t any work for employees or working hours have been modified or reduced, eligible employees will still be entitled to the JobKeeper payments.
How you can get help
Businesses will start to receive the JobKeeper payments in the first week of May. In the interim, the federal government has advised employers to pay their employees $750 per week. When businesses receive the first JobKeeper instalment in May, they can make a claim to be reimbursed from the ATO. Banks have indicated that they will do their best to help businesses bridge the gap between early April to early May.
In addition to the JobKeeper payment, businesses can also apply for cash flow support (BAS credits). You’re able to register your interest in receiving the payment via the ATO website here
The above information is a brief summary only and does not take into account your personal needs and is not a substitute for independent professional advice. We strongly recommend that you speak to your accountant as they will be able to provide you the most suitable advice for your individual circumstance and to ensure that you are also always receiving the most up to date information.
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