• COVID-19 VUCAP Risk

JobKeeper payment

Updated: Mar 31


Source: Australian Government - The Treasury

More information: Department of Industry, Innovation and Science


Situation


If your business has been significantly impacted by the Coronavirus you will be able to access a wages subsidy to continue paying your employees. Under the JobKeeper program, you will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum of six months. This assistance will help you keep staff and will help you restart when the crisis is over.


To receive the JobKeeper Payment, employers must:


• Register an intention to apply on the ATO website and assess that they have or will experience the required turnover decline.


• Provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired). For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.


• Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). For employees that were already receiving this amount from the employer then their income will not change. For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500, before tax. And for those employees earning more than this amount, the employer is able to provide them with a top-up.


• Notify all eligible employees that they are receiving the JobKeeper Payment.


• Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.


Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.



APPLICATION PROCESS

Businesses with employees


Initially, employers can register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020. Subsequently, eligible employers will be able to apply for the scheme by means of an online application.


The first payment will be received by employers from the ATO in the first week of May.


Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO.


Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.


It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.


Further details for businesses for employees will be provided on ato.gov.au.


Businesses without employees

Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via ato.gov.au from 30 March 2020.


Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.


People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments.


Payment will be made monthly to the individual’s bank account.


Further details for the self-employed will be provided on ato.gov.au.



What does this mean?


This is a significant protective measure for employers and employees. Organisations must act quickly and introduce the incentive into their risk management response. The initiative will have a positive affect on cashflow and employee retnetion and well-being.



Summary of the VUCAP view of this position and the impact on organisations.

Political - Favourable over the next 36 months

Economic - Favourable over the next 36 months

Sociocultural - Favourable over the next 36 months


Organisations should conduct a financial and human resource risk review and identify opportunities to leverage this position to protect employees and long-term viability.

cc 2020 VUCAP Pty Ltd - This information is collated via public and VUCAP internal sources and is free for use or distribution.

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