Yesterday (30 March), the Prime Minister and Federal Treasurer announced the Government’s JobKeeper Payment subsidy for businesses to keep more employees in jobs during the COVID-19 crisis.
The JobKeeper Payment will see businesses receive a fortnightly wage subsidy up to $1,500 per employee over six months, for each eligible employee that was on its books on 1 March 2020 and is retained or continues to be engaged.
Announcing the policy on Monday afternoon, Prime Minister Scott Morrison said the JobKeeper payment would bring the Government’s total economic support for the economy to $320 billion or 16.4 per cent of GDP.
“We will give millions of eligible businesses and their workers a lifeline to not only get through this crisis, but bounce back together on the other side,” the Prime Minister said.
“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.
“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.”
Under the package, an employer can receive the wage subsidy for full time and part time employees, including those employees who have been stood down. The JobKeeper Payment covers casual employees who have been with the employer for at least the last 12 months.
The wage subsidy also extends to employees who hold a subclass 444 special category visa, and migrant workers who are eligible for JobSeeker Payment or Youth Allowance (Other).
Employers should be aware of employees with multiple employers as employees are only eligible to receive the JobKeeper Payment from one employer.
The wage subsidy is available for employers that have self-assessed as having a 30 per cent reduction in revenue since 1 March over a minimum one-month period and, for employers with a turnover exceeding $1 billion, a 50 per cent reduction in business.
Businesses structured through companies, partnerships, trusts, sole traders and not for profit entities, including charities, are all eligible for the JobKeeper Payment.
Applications for the wage subsidy are being made through the Australian Taxation Office with more than 66,000 employers already registering their interest since the Government’s announcement.
Employers will receive the first payments in the first week of May as monthly arrears from the Australian Taxation Office and can distribute the payments to employees right away.
Employers are expected to pass these payments on to employees with expected legislation to include penalties for failures.
The Prime Minister flagged calling Parliament back earlier than the expected return date in August to pass legislation to give effect to this economic package. The Government is expected to engage with the Opposition on draft legislation this week. The Treasurer also raised the Government would be providing updates on further business cashflow support in coming days.
This unprecedented “rescue package” has been uniformly welcomed by business and unions.
Australian Chamber of Commerce and Industry CEO James Pearson called the announcement a “game changer when Australia needs it most”.
“Allocating $1500 per fortnight for all employees, from permanent employees to casuals who have been on the books for more than a year, is an effective approach and will stave off imminent job losses,” Mr Pearson said.
ACTU secretary Sally McManus called for the payments to be increased to the median wage of $1375 a week, but nonetheless cautiously welcomed the policy.
“We need to carefully examine the details of this announcement, however we are glad to see that it will apply to all businesses and most workers,” she said.
