In this second blog, we look at what the Australian Government has added to it’s initial Economic Stimulus package in response to the unprecedented economic challenges that COVID-19 presents. In order to support Australian businesses in the management of cash flow challenges and retaining of employees the government has provided assistance including cash flow support to businesses and temporary measures to provide relief for financially distressed businesses. Two of those measures are:
- Boosting cash flow for employers – uplift of the amounts as announced on 12th March.
- JobKeeper subsidy – first payments to eligible businesses should be received in the first week in May
Cash Flow Boost for Employers
The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000. These payments will help businesses and NFPs with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
Employers eligible for this subsidy will receive a payment of $1,500 per fortnight per employee with effect from 30th March 2020 for a period of six months
There are two levels of eligibility: for employers and employees
Eligible employers are those with:
- Turnover below $1bn that have experienced a reduction in turnover of more than 30% relative to a comparable period 12 months ago (of at least a month); or
- Turnover of $1bn or more that have experienced a reduction in turnover of more than 50% relative to a comparable period 12 months ago (of at least a month); and
- Are not subject to the Major Bank Levy.
Sole traders and the self-employed with an ABN, and not-for-profits (including charities) that meet the turnover tests are eligible for the JobKeeper payment.
Eligible employees are those who:
- Were employed by the relevant employer at 1 March 2020; and
- Are currently employed by the employer (including those who have been stood down or re-hired); and
- Are full time, part-time, or long term casuals (a casual employee employed on a regular basis for 12 months as at 1 March); and
- Are at least 16 years of age; and
- Are an Australian citizen, hold a permanent visa, are a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
- Are not in receipt of a JobKeeper Payment from another employer.
How the support is provided
- As applications are not yet open, you should register your intent to apply for the JobKeeper subsidy here
- Assess your turnover
- Do you have an accurate record of your 2018-2019 revenue and the 2019-2020 year to date
- Keep accurate records of revenue from March 2020 onwards
- Compare your revenue for the whole of March 2019 with the whole of March 2020
- Measure the % in decline and ensure it has declined by more than 30%
- If you are not eligible in March you may become eligible in another month – so keep monitoring
- Identify eligible employees
- Nominate the employees eligible for the JobKeeper payments – you will need to provide this information to the ATO and keep that information up to date each month. The ATO will use Single Touch Payroll to pre-populate the information in most cases
- Notify all eligible employees that they are receiving a JobKeeper payment. Employees can only be registered with one employer
- Pay eligible employees at least $1,500 per fortnight (before tax). If an employee normally receives $1,500 or more per fortnight before tax the employee should continue to receive their regular income
- Pay superannuation guarantee on normal salary and wages amounts paid to employees. If the employee normally receives less than $1,500 per fortnight before tax, the employer can decide whether to pay superannuation on the additional amount that is paid as a result of the JobKeeper program
Keep up to date about the available support for businesses. This link also provides various fact sheets and examples related to the JobKeeper Subsidy