Focus on: JobKeeper
15 May 2020
As the Prime Minister has noted, the battle against coronavirus is being fought on both the health and economic fronts. At the heart of the Federal Government’s economic response lies the $130 billion JobKeeper wage subsidy program, designed to support the employment of up to six million Australians over six months.
Announced at the end of March as part of the Morrison Government’s third and largest economic stimulus package, the Prime Minister described the JobKeeper package as a “lifeline” which was necessary to help keep employers connected to their staff during the coronavirus pandemic.
Eligible businesses that elect to participate in JobKeeper will receive a payment of $1,500 per fortnight per eligible employee until 27 September 2020. There are now more than 860,000 businesses employing more than 6 million workers formally enrolled in the program.
A key component of JobKeeper eligibility is the decline in turnover test which requires eligible employers to demonstrate a reduction in revenue of at least 30 per cent (or 15 per cent for ACNC-registered charities other than universities and schools) based on a comparable period a year ago.
Employers with an annual aggregated turnover of $1 billion must meet a higher threshold of 50 per cent to be eligible. Where an entity is part of a larger group which has, or estimates it will have, an aggregated turnover of more than $1 billion, the entity will be required to show a 50 per cent decline in turnover to be eligible to receive JobKeeper payments.
Correctly calculating the relevant decline in turnover for the JobKeeper payment scheme is critical, but every company will have individual circumstances that can complicate this assessment.
Employers who believe they are close to meeting the threshold, but fall short, are strongly encouraged to seek clarification from the Australian Taxation Office (ATO). Importantly, the Treasurer and Treasury have also shown a willingness to update and clarify the rules where there are anomalies and issues that need to be addressed to help ensure the efficient operation of the JobKeeper program.
Despite calls to wind back the JobKeeper program before its full six-month duration, the Government has insisted the wage subsidy will run the full course. However, an in-built review in June will provide a further opportunity to refine and make amendments that are deemed necessary.
Detailed JobKeeper guidance can be found here
Richard King is Managing Partner – Melbourne at GRACosway. With a background in economic policy, Richard provides counsel to clients on a range of policy, regulatory and legislative issues.
Contact Richard on +61 407 766 633 or Contact Us