COVID-19 JobKeeper Payment Scheme

The JobKeeper payment scheme announced by the Federal Government has been designed to assist employers (inc self-employed) affected by the Coronavirus pandemic to continue to pay their workers.   The legislation governing this program is currently being finalised and will come before Federal parliament in the week of 6 April 2020.

Employers registered for the JobKeeper scheme will be able to make payments to their employees from the first week of May 2020.  Current information indicates that a business will need to establish a fall in turnover for the relevant month or 3 months (depending on the “natural activity statement reporting period of that business”), compared with the year earlier to be eligible to access this scheme.

The JobKeeper Payment may provide the employee a bigger fortnightly payment when compared to the JobSeeker Payment, for example, as follows:

Under the JobKeeper Payment scheme – an eligible employee will receive (through their employer) minimum fortnightly salary income of $1,500 before tax.

Under the JobSeeker Payment scheme – an eligible employee (assuming they are single with no children) would be expected to receive a fortnightly payment of up to $565.70 plus the $550 Coronavirus supplement (resulting in a total fortnightly payment of up to around $1,115). Please note that some JobSeeker recipients may also be eligible for other Government entitlements.

Important factors for employers registering for the JobKeeper scheme

As there is not yet a clear guidance provided by the Government it is important for an employer to consider the following potential consequences of JobKeeper scheme:

• JobKeeper payments made to an employer will be assessable to the employer

• PAYG withholding will apply to JobKeeper payments

• Superannuation Guarantee contributions are required in respect of JobKeeker payments

• Potential Payroll tax obligations may arise

• Potential liability for WorkCover premiums may arise

• Whether leave entitlements (e.g., annual leave, sick leave and long service leave) can accrue in respect of employees who receive the JobKeeper Payment from their employer (potentially resulting in additional liabilities for employers).

All of our staff are keeping up to date with the latest on this scheme, to find out more on how to either register or clarify what the JobKeeper payment means to you or your employees contact one of our qualified accountants on 07 5437 9900.  We are here to help you through this process.