On the 8th of April, Federal Parliament approved the $130 billion JobKeeper wage subsidy. Prime Minister Scott Morrison said the crisis could last “far longer” than the timeframe set in the mammoth economic measure, which offers $1,500 per fortnight to six million workers.
In our blog last week, we provided an update on the original announcement of JobKeeper, describing it as a “game changer”. It certainly is, providing income for up to six million workers and keeping thousands of businesses afloat and employing. Here is a link to our previous article.
The Treasury issued a fact sheet (updated 5th April) which comprehensively covers FAQ’s. We recommend this for your detailed reading, as it provides clear answers to many questions and clarifies a range of areas that were previously unclear.
Here is the link to the full Treasury document, as well as links to sections which may be of relevance to you: https://treasury.gov.au/sites/default/files/2020-04/JobKeeper_frequently_asked_questions.pdf
FAQ’s from the Treasury Fact Sheet:
- FAQ’s for Employers – page 1
- FAQ’s for Employees – page 7
- FAQ’s for Self-Employed and Other Eligible Businesses – page 10
- Impact on Other Programs – page 11
- Compliance – page 11
In addition to The Treasury’s clarifications, we’ve provided commentary on some of the key issues. Further below, we talk about integrity and enforcement of compliance, and also give an update on some other COVID-19 support measures.
Contrary to some popular understandings, the payment program does not start on 1st March. The first payment period (the employer paying the employee) starts on 30th March.
As mentioned in The Treasury’s document, employers who do not automatically qualify under the turnover threshold eligibility may still be eligible for the Job Keeper payment, at the discretion of the ATO, based on the facts presented by the employer to establish that they have been adversely affected by the impacts of COVID-19. If you believe your business falls into this category, we highly recommend you contact your Morrows Business and Taxation Advisor.
The Subsidy is Only Paid Following Payment by Employer
Employers will need to be careful ensuring that payments are not preemptively made prior to being approved for the Job Keeper Program. Careful consideration is needed prior to payments being made. There may be some strategies which can be implemented to protect the employer.
Under the JobKeeper package, inspectors from the Commonwealth Workplace Ombudsman will have the power to check businesses to see if they are following the new laws.
In the event that an employer receives funding in error, the organisation will have to pay back the full sum, plus interest. Furthermore, if the Tax Office is suspicious about an employers’ eligibility, they can delay the payment by replacing it as a tax credit.
Update on Fair Work Legislation
On Wednesday, the Fair Work Commission changed 99 workplace awards to give employees access to two weeks of unpaid pandemic leave, should they need to self-isolate; this also includes an option to take double their leave at half pay, if their employer agrees. This means an employee gets 1 week’s annual leave payment (including annual leave loading if applicable) for every 2 weeks of annual leave they take.
All eligible employees can take the 2 weeks’ leave – the leave is available in full immediately, it is not pro-rated for employees who don’t work full-time. These arrangements must start prior to 30 June but can continue after that – for both types of leave. If applying for pandemic leave, a medical certificate must be provided for the period of this unpaid leave.
For more information on how amendments to awards will affect your organisation, please contact Morrows Human Resources Advisory.