Australian Federal Government announced a $130 billion stimulus package on 30 March 2020 for the employers and employees affected by COVID-19 pandemic to boost the economy and businesses. We at NCS have been receiving hundreds of questions regarding the same. Though the Job Keeper legislation is yet to be passed and is susceptible to changes, we have put together the frequently repeated questions along with their answers for your clarification.
Q: I am a sole trader with employees and I have closed the business completely due to Coronavirus pandemic. In this case, which payment am I eligible for, the “job keeper payment” or the “job seeker payment”?
A: The Job Keeper Payment is to keep the employees from losing their jobs or jobs currently held. This logic also applies to the business owners/sole traders/partnerships/trusts etc (if you are not very clear on the category you belong to, reach us for clarification). Thus, if you ran a business of any capacity with impact on your revenue due to COVID-19 pandemic, you are eligible for this Payment as a business owner or a staff member.
The Job Seeker Payment allocated, is for unemployed or those seeking jobs. So, if you claim payment based on unemployment, it is likely that you were already unemployed around the time the pandemic started but not as the direct result of COVID-19.
NOTE: You can avail only one of the payments either Job Keeper or Job Seeker Payment.
Q: I have come to know that, we can apply for both Job Seeker and Job Keeper payments, and then the government would determine the payment applicable to me, is this correct?
A: Yes, that is correct. It is advised to apply for both the payments when not sure about your category.
Q: Can people holding multiple jobs, get payment for the primary job in addition to the casual wages paid for the other jobs.
A: We are waiting for the legislation to pass, to be sure on the payment method in this scenario.
However, the job keeper payment can be availed only from one employer.
Q: Does the $1500 fortnightly wage depend on the spouse’s wage?
A: No, the Job Keeper Allowance is not means-tested; you will be able to receive it from your employer. However, the Job Seeker allowance is means-tested and you will not be eligible for it if your partner’s earning is more than $79,762 per year.
Q: Can we apply for the Job Keeper payment now or is it just expression of interest at this stage?
A: At this stage, it is just an expression of interest. However, you can go ahead and apply for it here.
Q: I am a sole trader who has been trading since Dec 2019. And, I see that the eligibility criterion for the Job Keeper Payment is a minimum 1 year of employment. Does this make me ineligible for the Payment?
A: To be completely certain about this we are waiting for the legislation to pass. However, at this stage, we understand that the 1 year employment criterion is only applicable to casuals or casual employment. Therefore, you may be eligible for the Job Keeper Payment.
Q: When business stands down employees, does the annual leave and sick pay get accrued based on their regular work hours for the stand-down period?
Q: Due to the pandemic, I stood down many staff members whom I would like to re-hire under this arrangement. How should I proceed with the same?
A: You can re-hire the employees and pay their wages from your monthly cash flow. Also, in this case, the redundancy pay has to be paid back to the staff. The government will reimburse the employer starting from the first week of May 2020, which includes the back pay from March 30, 2020.
This is applicable, only if the staff was employed as on 1 March 2020, and the casual employee had been working for more than 1 year with the company.
The ATO will be providing the allowance to employees who have been stood down only if re-hired.
Q: How is the package applicable for employees who are currently on paid or unpaid annual leave?
A: This is solely dependent on the arrangement made based on the unique situation and discussion between the employer and employee. However, it might be in the best interest of the employee to return to work if possible.
Q: The payment by government starts only from May, what are some suggestion to the employers to support and pay the employees until then?
A: We suggest the employers increase the cash flow by thinking outside the box like cutting the hours, cutting the pay, online sales/marketing etc. Also, assign additional jobs to the employees based on the change of work requirements.
If the employee is not re-hired and paid in April, ATO will be unable to provide the approval to you or your staff for the payment package.
Q: I have been running an online travel agency for 6 months. I had to close the business due to a significant drop in revenue. Will I be eligible for the Job Keeper Payment?
A: Yes, Job Keeper Payment is not means-tested and applicable if your business revenue has been affected due to COVID-19 pandemic.
Please refer to our Job Keeper / Job Seeker blog post for more information.
Q: My husband and I run a small scale Pty ltd Business and we draw our pay from the business when funds are available. We understand that our employees will be eligible for the payment, but since we are not on the payroll will we be eligible too?
A: To be completely certain about this we are waiting for the legislation to pass. However, the latest fact sheet implies that owners in a company/trust/partnership who do not draw wages will be eligible for the Job Keeper Payment. We will keep you posted on the same.
Q: I own a beauty salon and I had to stand down all my staff. I understand that my full-time employees will be eligible for the Job Keeper Payment. However, is my casual employee who has worked with us for 2 months eligible for it?
A: No. As per the eligibility criteria, casual employees must have worked with the employer for 1 year or more.
Q: Are the tax and super withheld on these payments?
A: Tax: Yes, staff in receipt of the Job Keeper Allowance would receive the net amount into their bank account.
Super: Employers need not pay super on the $1500 per fortnight component. It is up to the employers, whether or not they pay superannuation on additional job keeper payments. Let us look at some examples.
Example 1: Employee who normally receives $1,000 a fortnight plus superannuation will receive $1,500 Job Keeper payment, with superannuation paid on the first $1,000 and the employer can decide whether to pay the super for the remaining $500.
Example 2: Employee who normally receives $3,000 a fortnight plus super may only receive half the usual super under the Job Keeper Payment arrangement, depending on the decision of the employer (which will be based on the cash flow).
Q: What is to be expected when the payment from government stops after six months and the employer is still struggling financially?
A: This is difficult to predict as it completely depends upon the type of business and the business owner.
Q: I was a long term casual employee (2 years) with earnings of $1000 per fortnight and I was recently stood down. Am I eligible to receive the full $1500?
A: Yes, you are eligible.