As you'll have likely seen in the press the government has announced some further stimulus measures in addition to those already announced and have also amended a key component for those seeking the JobSeeker allowance (please see below, towards the end of this email).
We've attached the previously announced measures for reference as they remain relevant, but the key additional measure announced yesterday is the JobKeeper Payment.
Unfortunately there's a bit of confusion around this so there's some further detail below based on what we know, but please contact our office if you need more information or guidance.
The current status of JobKeeper:
The below detail has been announced but it yet to pass parliament so there may be further refinements or detail to emerge.
What is JobKeeper?
It's a business support package with payments to be made to employers, not employees (however the payments must be on-paid to employees). The overall design of the policy is to assist employers in keeping employees on their books.
Eligible employers will qualify for a payment of $1,500 per fortnight per employee for a maximum of 6 months. Assuming that the legislation passes parliament, payments will begin from May 2020 but will be backdated to 30 March 2020.
Which employers are eligible?
Employers become eligible if their business turnover has reduced by more than 30% vs last year (if the business has less than $1 billion in turnover) or has reduced by more than 50% vs last year (if the business has turnover above $1 billion).
Employers can be a company, trust or not-for-profit and the indication is that it will also include the self employed and sole traders.
If the employer is eligible and registers then the payments must be passed onto their eligible employees.
Businesses must register for the benefit:
Only businesses that register for JobKeeper payments will be eligible. If the business doesn't register then they won't receive any payments irrespective of how much their turnover has been impacted by the coronavirus crisis.
Businesses can register via this link - https://www.ato.gov.au/general/gen/JobKeeper-payment/. The business will need to declare the impact on their turnover as well as all employees who are eligible for the payment. This will likely need to be updated monthly.
Which employees are eligible?
Any employee of the business as at 1 March 2020 is eligible if they continue to be employed or continue to be engaged by the business. This includes full time, part time and casuals (provided that the casual was employed by that business for at least 12 months as at 1 March 2020).
Employees who've been stood down are considered to be eligible but those made redundant are not eligible unless they've subsequently been rehired (and were employed at 1 March 2020).
Employees who work for more than 1 employer can only claim the benefit once. The indication is that they'll be able to claim from their "primary employer", which is the employer from whom they claim the tax-free threshold.
All eligible employees from all eligible registered businesses will receive the JobKeeper payment.
The benefit is intended to replace lost income for those who've been stood down, those who've have had their income reduced significantly and/or to provide a subsidy to employers to help them pay employees.
If an employee's current gross income is more than $1,500/fortnight then their employer need only pay the difference between the $1,500/fortnight JobKeeper payment and the employee's wage.
If an employee's current gross income is less than $1,500/fortnight (including those currently receiving no income) then they'll receive the full $1,500/fortnight benefit (even if that's more than they would otherwise normally receive).
Impact on superannuation, tax and social security:
The JobKeeper payments won't be eligible for superannuation contributions.
The JobKeeper payments will be treated as taxable income.
The JobKeeper payments will also be assessable income for Centrelink purposes (please refer below).
Can an employee receive the JobKeeper payment and also make a claim for the JobSeeker allowance?
Please note that the JobSeeker allowance was formally known as Newstart and those of a certain age would know it as "the dole".
It's important to note that the JobKeeper payment is assessable income in Centrelink's eyes and those receiving it must report that income to Centrelink.
The current cut off point for JobSeeker eligibility is $1,086.50 per fortnight (for a single person with no dependants). Hence, those receiving the JobKeeper payment won't be eligible for the JobSeeker allowance as their income will be too high.
What should you (or anyone you know) do if they're currently financially impacted?
As JobKeeper payments are only paid to registered businesses, it's suggested that those impacted by the crisis contact their employer to check if the employer qualifies and if they intend to register.
If their employer won't register or is unable to register for any reason then it's best to revert to the assistance available to individuals and families (please refer to the attached).
An important enhancement for those seeking the JobSeeker allowance:
Typically those applying for a JobSeeker benefit need to meet an income test and an assets test.
The government has already announced a temporary lifting of the assets test in response to the crisis but has now also introduced a more lenient (and sensible) treatment of income earned by the partner of someone seeking a JobSeeker allowance.
Previously if the partner of an applicant for the JobSeeker allowance earned more than $48,000 pa then the claim would be rejected. That threshold has now been lifted to $79,762 pa. The purpose of this is to capture some of those whose income has diminished or completely disappeared due to the crisis but who would otherwise have been precluded from support because of their partner's income.
Please contact our office if any further information is needed and we'll respond ASAP.
Next Level Financial Services provides financial information in an easy to read format.