The Rules interact with the Coronavirus Economic Response Package Omnibus (Measures No. 2 ) Act 2020 (Cth). For example, in order for a Jobkeeper enabling stand down direction under the Act to be authorised, when the direction was given the employer must have qualified for the Jobkeeper scheme. A summary of the rules follows.
The JobKeeper scheme will be available each fortnight from Monday 30 March 2020 up to and including Sunday, 27 September 2020.
Only one entity is entitled to the JobKeeper payment for a single employee (i.e. if an employee has multiple jobs, employers should confirm whether their other employer/s have already claimed the JobKeeper payment). An employee can nominate whichever employer they prefer, subject to the restrictions outlined below, and cannot change this nomination after it has been made.
The criteria which must be satisfied to qualify for the JobKeeper payment each fortnight include the following:
- the employer qualifies for the scheme; and
- the employee is eligible to receive the payment; and
- the employer has distributed a total amount of $1,500 or more to the employee, including but not limited to salary, wages, commission, bonus, allowances, amounts withheld for tax, and superannuation contributions under a salary sacrifice arrangement; and
- the employer has notified the ATO that it wishes to participate in the scheme by the end of the fortnight in which it intends to claim payment (or by Sunday 26 April if claiming payments from 30 March); and
- the employer has provided the ATO with the required information to enable payment (and notified the employee in writing within seven days).
WHEN DOES AN EMPLOYER QUALIFY FOR THE SCHEME?
The employer must have carried on business in Australia since on or before 1 March 2020 and have satisfied the decline in turnover test at or before the time the JobKeeper payment was made.
The decline in turnover test
The entity’s projected GST turnover for the turnover test period (i.e. a calendar month that ends after 30 March 2020 and before 1 October 2020, or a quarter that starts on 1 April 2020 or 1 July 2020) must fall short of the entity’s current GST turnover for a relevant comparison period (i.e. the period in 2019 that corresponds to the turnover test period) by the following amounts:
- ACNC-registered charity = 15%
- Aggregated turnover has or will be at or below $1 billion = 30%
- Aggregated turnover has or will exceed $1 billion = 50%
Note – Aggregated turnover includes the annual turnover of an entity that is connected with or an affiliate of the business (i.e. a group of companies is assessed as a whole).
WHO IS AN ELIGIBLE EMPLOYEE?
As at 1 March 2020, the employee must have been:
- aged 16 years or over; and
- an employee (other than a casual employee), or a long term casual employee (i.e. they had been employed by the entity on a regular and systematic basis for 12 months); and
- an Australian resident, or a resident of Australia for tax purposes and the holder of a Subclass 444 (Special Category) visa.
An eligible employee must notify their employer in the approved form that they:
- satisfy the requirements outlined above; and
- are not excluded from payment for the reasons outlined below; and
- are not an employee (other than a casual employee) of another entity (this requirement applies only if the employee is a long term casual employee); and
- have not given any other entity notification of their eligibility for payment; and
- agree to be nominated by the entity as an eligible employee under the scheme.
An employee is excluded from receiving payment if:
- parental leave pay is payable to the individual and the individual’s PPL period (as defined in the Paid Parental Leave Act 2010 (Cth)) overlaps with, or includes, the fortnight; or
- at any time during the fortnight, the individual is paid dad and partner pay; or
- the individual is totally incapacitated for work throughout the fortnight, workers' compensation is payable to the individual, and the amount is payable in respect of a period that overlaps with, or includes, the fortnight.
If an employer qualifies for the scheme, they must notify the ATO in the approved form within seven days of the end of each calendar month of the following:
- the entity’s current GST turnover for the month that has just ended; and
- the entity’s projected GST turnover for the following month.
Business owners can also qualify for the JobKeeper payment in certain circumstances.
If your business requires help in understanding or navigating these issues, please contact a member of our Employment team who can assist.
If you require further information or have any queries in relation to this legal update, please contact Matthew Smith or Mark Curran.