The Australian Government will deliver $130 billion JobKeeper subsidy to support around 6 million workers who will receive a flat payment of $1,500 per fortnight through their employer, before tax.
The JobKeeper payment aims to keep Australians in jobs as businesses tackle the significant economic impact from the coronavirus. The Government estimates that the payment will provide the equivalent of around 70 per cent of the national median wage.
The payment will ensure eligible employers and employees stay connected while some businesses move into hibernation – a concept the Australian Government has been floating which would allow companies to pause their business and some of the associated costs.
The subsidy brings the Government’s total economic support for the economy to $320 billion or 16.4 per cent of GDP.
Prime Minister Scott Morrison said “We will give millions of eligible businesses and their workers a lifeline to not only get through this crisis, but bounce back together on the other side.”
“This is about keeping the connection between the employer and the employee and keeping people in their jobs even though the business they work for may go into hibernation and close down for six months.
“When the economy comes back, these businesses will be able to start again and their workforce will be ready to go because they will remain attached to the business through our JobKeeper payment.”
How the JobKeeper payment works
The payment will be paid to employers, for up to six months, for each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by that employer.
Where a business has stood down employees since 1 March, the payment will help them maintain connection with their employees.
Employers will receive a payment of $1,500 per fortnight per eligible employee. The business must then pay at least $1,500 (before tax) per fortnight to every eligible employee.
The program will commence on 30 March 2020, with the first payments to be received by eligible businesses in the first week of May as monthly arrears from the Australian Taxation Office.
Eligible businesses can begin distributing the JobKeeper payment immediately and will be reimbursed from the first week of May.
The Government is due to provide updates on further business cashflow support in coming days.
What businesses are eligible for the JobKeeper subsidy?
Eligible employers are those with an annual turnover of less than $1 billion who self-assess that they have a reduction in revenue of 30 per cent or more since 1 March 2020 over a minimum one-month period.
Employers with an annual turnover of $1 billion or more would be required to demonstrate a reduction in revenue of 50 per cent or more to be eligible.
Eligible employers include businesses structured through companies, partnerships, trusts and sole traders.
Not for profit entities, including charities, will also be eligible.
What employees are eligible for the JobKeeper payment?
Full time and part time employees, including stood down employees, would be eligible to receive the JobKeeper payment.
Casual employees that have been with their employer for at least the previous 12 months will also be eligible for the payment.
An employee will only be eligible to receive this payment from one employer.
Eligible employees include Australian residents, New Zealand citizens in Australia who hold a subclass 444 special category visa, and migrants who are eligible for JobSeeker Payment or Youth Allowance (Other).
Self-employed individuals are also eligible to receive the JobKeeper payment.
The JobSeeker payment is subject to a personal and partner income test. The Government has temporarily relaxed the partner income test limits so that those whose partner earns less than $3,068 per fortnight, around $79,762 per annum, are eligible for the support.
How do businesses apply for the Jobkeeper subsidy?
Eligible businesses can apply for the payment online and are able to register their interest via ato.gov.au
A fact sheet with more information about the Jobseeker subsidy is available on the Australian Treasury website.