JobKeeper Payment (30 March 2020 to 27 September 2020)
The JobKeeper Payment helps businesses affected by the coronavirus cover the costs of their employees’ wages, and more people to retain their jobs and continue to earn an income. The scheme involves the Australian Government paying employers a wage subsidy at a flat rate of $1,500 per employee per fortnight for up to six months. The JobKeeper Payment was backdated to 30 March 2020 for employers who registered by 31 May 2020 for JobKeeper fortnights in April and May 2020. Employers who register after 31 May 2020 will receive JobKeeper Payment on a prospective basis.
There is no cap on the number of employees eligible for the subsidy. This amount is equivalent to around 70% of the Australian median wage and in the accommodation, hospitality and retail industries, it is equivalent to the full median wage.
Eligible employers (30 March 2020 to 27 September 2020)
Employers with turnover of less than $1 billion are eligible if they experience at least a 30% decline in revenue since 1 March in a month versus the prior year. Businesses with annual turnover of $1 billion or more are eligible if their turnover falls by more than 50%.
Employers must apply to the Australian Taxation Office (ATO) to participate in the scheme and provide supporting information demonstrating the impact felt in their business. Employers will also need to continue to report to the ATO the number of eligible employees employed by their business each month.
Self-employed individuals (businesses without employees) that meet the turnover tests that apply for employers are eligible to register one person, who is actively engaged in operating the business, for JobKeeper Payments. Eligible individuals include a sole trader, partner in a partnership, beneficiary of a trust and a director or shareholder of a company.
Charities that are registered with the Australian Charities and Not-for-Profits Commission (other than a school or university) will be eligible for the JobKeeper Payment if they have suffered a 15 per cent decline in turnover as a result of the coronavirus. This measure is to support a sector which is expected to have a significant increase in demand for its services. Schools and universities are subject to turnover tests noted earlier.
Eligible employees (30 March 2020 to 27 September 2020)
Employers will receive the payment for each eligible employee. Employees are eligible where they:
- are currently employed by an eligible employer (including if stood down or rehired)
- were employed by the eligible employer (or another entity in their wholly-owned group) either as:
- a full-time, part-time or fixed-term employee at 1 March 2020; or
- a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020 and not a permanent employee of any other employer.
- were aged 18 years or older at 1 March 2020 (if you were 16 or 17 you can also qualify for fortnights before 11 May 2020, and continue to qualify after that if you are independent or not undertaking full time study).
- were either:
- an Australian resident (within the meaning of the Social Security Act 1991); or
- an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020.
- were not in receipt of any of these payments during the JobKeeper fortnight:
- government parental leave or Dad and Partner Pay under the Paid Parental Leave Act 2010; or
- a payment in accordance with Australian workers compensation law for an individual's total incapacity for work.
Only one employer can claim the JobKeeper Payment in respect of an employee.
Self‐employed persons will be eligible to receive JobKeeper Payment where they meet the relevant turnover test, and are not a permanent employee of another employer.
Extension of the JobKeeper Payment (28 September 2020 to 28 March 2021)
The Australian Government has announced an extension of the JobKeeper Payment, which was originally due to run until 27 September 2020 and will now continue to be available to eligible businesses (including the self-employed) and not-for-profits until 28 March 2021.
Employees will continue to receive the JobKeeper Payment through their employer during the period of the extension if they and their employer are eligible and their employer is claiming the JobKeeper Payment. However, the amount of the JobKeeper Payment will change from the rates set out above.
From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:
- $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
- $750 per fortnight for other eligible employees and business participants.
From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:
- $1,000 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average and for business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
- $650 per fortnight for other eligible employees and business participants.
Businesses and not-for-profits will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants).
The Commissioner of Taxation will have discretion to set out alternative tests where an employee’s or business participant’s hours were not usual during the February 2020 reference period. For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February 2020.
Guidance will be provided by the ATO where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances the general rules do not cover.
The JobKeeper Payment will continue to be made by the ATO to employers in arrears. Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper Payment (before tax), based on the payment rate that applies to each employee.
Eligible employers (28 September 2020 to 28 March 2021)
From 28 September 2020, businesses and not-for-profits seeking to claim the JobKeeper Payment will be required to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover).
In order to be eligible for the first JobKeeper Payment extension period of 28 September 2020 to 3 January 2021, businesses and not-for-profits will need to demonstrate that their actual GST turnover has fallen in the both the June and September quarters 2020 relative to comparable periods (generally the corresponding quarters in 2019).
For the period of 4 January 2021 to 28 March 2021, businesses and not-for-profits will again need to demonstrate that their actual GST turnover has significantly fallen in each of the June, September and December 2020 quarters relative to comparable periods (generally the corresponding quarters in 2019).
To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:
- 50 per cent for those with an aggregated turnover of more than $1 billion
- 30 per cent for those with an aggregated turnover of $1 billion or less
- 15 per cent for Australian Charities and Not-for-profits Commission (ACNC) registered charities (excluding schools and universities).
Registered religious institutions responsible for religious practitioners will continue to be eligible to receive the JobKeeper Payment provided they meet existing eligibility requirements and the additional turnover tests during the extension period.
Where a business or not-for-profit does not meet the additional turnover tests during the extension period, their eligibility prior to 28 September 2020 is not affected.
The JobKeeper Payment will remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.
Other eligibility rules for businesses and not-for-profits and their employees remain unchanged.
Eligible employees (28 September 2020 to 28 March 2021)
The eligibility rules for employees remain unchanged.
Register via the ATO website: Enrol for the JobKeeper payment
Australian Government Fact Sheet: JobKeeper Payment - Information for Employers
ATO Law Companion Ruling 2020/1: JobKeeper payment – decline in turnover test
ATO guidance regarding time: JobKeeper key dates
Australian Government Fact Sheet: Extension of the JobKeeper Payment