More details on the $130 billion ‘JobKeeper’ scheme

Prime Minister Scott Morrison has announced Australia’s biggest economic rescue package – a $130 billion ‘JobKeeper’ scheme to “keep the engine of our economy running” as workers and businesses battle the devastating economic impacts of COVID-19.

“This is about keeping the connection between the employer and the employee and keeping people in their jobs even though the business they work for may go into hibernation and close down for six months,” said Prime Minister Morrison.

“When the economy comes back, these businesses will be able to start again and their workforce will be ready to go because they will remain attached to the business through our JobKeeper payment.

“We are living in unprecedented times with the twin battles that we face and that we fight against the virus and against the economic ruin that it can threaten. This calls for unprecedented action.”

Treasurer Josh Frydenberg joined the Prime Minister at a press conference on Monday to make the huge announcement and said the country was about to go through “one of the toughest times in its history”.

“This will keep Australian workers connected with their employer and provide hope and more certainty during these difficult and challenging times.”

Treasury has released a fact sheet on the scheme – https://mcusercontent.com/033deaa80ce289abbf9959f3d/files/5c953227-d73d-4b81-892f-0277b9733974/Treasury_Fact_Sheet_Job_Keeper_Payment.pdf

The historic wage subsidy scheme will see eligible businesses receive $1500 per fortnight per employee for up to six months.

Eligible employers will be those with an annual turnover of less than $1 billion who have suffered a reduction in revenue of 30 per cent or more due to the COVID-19 pandemic, since March 1 2020 over a minimum one-month period.

Employers with an annual turnover of $1 billion or more would be required to demonstrate a reduction in revenue of 50 per cent or more to be eligible.

Businesses subject to the Major Bank Levy will not be eligible.

Eligible employers will receive the payment for each eligible employee that was on their books on March 1 2020 and continues to be engaged by that employer – including full-time, part-time, long-term casuals and stood down employees.

Casual employees eligible for the ‘JobKeeper’ payment are those employees who have been with their employer on a regular basis for at least the previous 12 months as at March 1 2020.

Self-employed individuals will be eligible to receive the JobKeeper payment where they have suffered or expect to suffer a 30 per cent decline in turnover relative to a comparable prior period (of at least a month).

Treasury has released a fact sheet with more details about the ‘JobKeeper’ scheme and it includes an outline of the payments process for eligible employers and employees who participate in the scheme:

• If an employee ordinarily receives $1500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace
arrangements. The ‘JobKeeper’ payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).

• If an employee ordinarily receives less than $1500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1500 per fortnight, before tax.

• If an employee has been stood down, their employer must pay their employee, at a minimum, $1500 per fortnight, before tax.

• If an employee was employed on March 1 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1500 per fortnight, before tax.

It will be up to the employer if they want to pay superannuation on any additional wage paid because of the ‘JobKeeper’ payment.
Payments will be made to the employer monthly in arrears by the Australian Taxation Office.

The subsidy will start on March 30 2020, with the first payments to be received by employers in the first week of May. Businesses can register their interest in participating in the payment on the ATO website.

The wage subsidy is predicted to help six million workers with the payment providing the equivalent of around 70 per cent of the national median wage.

Prime Minister Morrison said the JobKeeper payment scheme would bring the Government’s total economic support for the economy to $320 billion or 16.4 per cent of GDP.