Third Government Stimulus Response to COVID 19

Dear valued client,

As you are aware, the government announced a 3rd Government Stimulus Package yesterday.

This package is all about the Jobkeeper Payment Scheme – this will ensure that each eligible employee receives at least $1,500 per fortnight (before tax).

Background

The government will pay eligible employers $1,500 per fortnight per employee for a maximum of 6 months to subsidise the cost of wages paid to employees.

The intention of the scheme is to keep employees paid and in a job while employers continue to run their business during Coronavirus shut down.

The scheme is effective from 30 March 2020 and employers will receive their first payment in the first week of May 2020.

What This Means for Employers

The scheme is available to:

    • Employers with turnover less than $1bil.
    • Self-employed individuals with turnover less than $1bil.
    • Employers where turnover has reduced by 30% in a comparable period (or expected to reduce by 30% for those self-employed).
    • Employers have eligible employees currently engaged, previously stood down prior and/or re-engaged employees.

Note: “30% turnover reduction” is to be based on a comparable period one year ago – of at least one month. E.g. March 2020 vs March 2019.

Question: Do I need to keep paying my employees between now and May 2020? Yes, you’ll need to process payroll as per usual.

What This Means for Employees

Employees will be covered by the scheme if:

    • They were on the employer’s books as at 1 March 2020 (NOTE: casuals must be employed on a regular basis for at least 12 months).
    • They continue to be engaged by their employer.
    • They have been stood down before the scheme announcement, provided they were employed on 1 March 2020.
    • They have been re-engaged by their employer.

Note: Employees are not able to receive jobkeeper payments/subsidised wages from more than one employer.

Employees are not eligible to receive “backdated” payments prior to 30 March 2020 as the scheme is not effective until this date.

How Payments Will Work

    1. Employer will receive $1,500 per fortnight per employee received from the ATO on a monthly basis in arrears.
    2. The Government Jobkeeper payment will be backdated to 30/03/2020.
    3. If an employee usually receives less than $1,500 gross per fortnight, the employee must be paid a minimum of $1,500 gross per fortnight.
    4. Employers must notify employees if they are receiving the Jobkeeper payment i.e. advise employees that their wages are being subsidised.

 How to Apply – Employer Application

    1. Employers must register an intention to apply via ATO: https://www.ato.gov.au/general/gen/JobKeeper-payment/
    2. Employers must advise the ATO the number of eligible employees engaged as at 1 March 2020 (inclusive of those stood down and/or re-engaged).
    3. For self-employed individuals only: nominate the individual who is to receive payment and provide their respective TFN.

Note: Once the scheme has been accessed, employers must provide the ATO with monthly updates on eligible employees i.e. if there are any changes to the number of employees that the employer is eligible to receive payments for.

This is a great initiative from the government, which will help many businesses and employees under current financial pressure.

In our opinion, the Jobkeeper Payment should’ve been introduced in the 1st Stimulus Package, which would’ve eased the demand at Centrelink and anxiety for many people!

Anyway, this is a great step to the right direction by the government.

Here is a link to the Government fact sheet – Jobkeeper Payment – Information for Employers

Our team at MAA are here to help, please do not hesitate to contact us if you have any questions or require assistance.

Please feel free to share this post with your friends and family.

Warmest regards,

Prathana Harris – CPA
Director – My Accounting Advantage

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