Vincent Young has compiled a list of FAQs to help employers understand the JobKeeper scheme.
Employers (including not-for-profits) will be eligible for the jobkeeper payment if, they have been carrying on a business in Australia, or been a non-profit body pursuing its objectives principally in Australia on 1 March 2020 and at the time of applying:
- their business has an aggregated turnover of less than $1 billion (for income tax purposes) and they estimate their turnover has fallen or will likely fall by 30% or more; or
- their business has an annual turnover of $1 billion or more (for income tax purposes) and they estimate their turnover has fallen or will likely fall by 50% or more; and
- their business is not subject to the Major Bank Levy.
Employing entities may comprise individuals in business as sole traders, partnerships, or bodies corporate (including corporations).
Note: For charities registered with the Australian Charities and Not-for-profits Commission (ACNC), they will be eligible if they estimate their turnover has or will likely fall by 15% or more relative to a comparable period.
You can claim the jobkeeper payment for eligible employees that were employed on 1 March 2020, and continue to be employed while you are claiming the jobkeeper payment.
An eligible employee is an employee who:
- is currently employed by the eligible employer (including those stood down or re-hired);
- is a full-time or part-time employee, or a casual employee (employed on a regular and systematic basis for longer than 12 months as at 1 March 2020);
- is a permanent employee of the employer, or if a casual employee, not a permanent employee of any other employer;
- was aged 16 years or older at 1 March 2020, with the exception of full time students who are 17 years old and younger and who are not financially independent;
- was an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444)
Visa Holder at 1 March 2020;
- was a resident for Australian tax purposes on 1 March 2020; and
- is not in receipt of a jobkeeper payment from another employer.
The employee must have also given you a notice in the approved form (the “nomination notice”) and not be excluded from being an eligible employee.
- You can only claim the jobkeeper payment for eligible employees if you pay (at least) the $1,500 per fortnight (before tax) to each eligible employee.
- You are required to notify all eligible employees that they are receiving the jobkeeper payment.
- You must provide each employee with a nomination form unless you reasonably believe that the employee does not satisfy the eligibility requirements.
No. There is no express entitlement to re-employ an employee that has been terminated from their employment after 1 March 2020.
No. The employee must have been employed as of 1 March 2020.
Yes. If the employee was employed on a fixed term contract as at 1 March 2020, they will still be an eligible employee (provided they meet all the other eligibility requirements).
No. You may decide that it is not in your business’ best interests to commit to the obligations that are tied to jobkeeper payments.
If you are eligible, payments will be made to the employer monthly in arrears by the ATO. The first payments are set to be received by employers in the first week of May 2020.
If I have eligible employees earning less than $1,500 a fortnight, before tax, do I “top-up” the employee’s pay to $1,500 a fortnight, before tax?
Yes. However, the top-up amount is not subject to superannuation.
If employees had agreed to a reduction in pay prior to the introduction of jobkeeper do I have to return to their original pay rate?
No. You only have to ensure that an employee is earning at least $1,500 per fortnight (before tax).
However, you may decide to review that agreement in light of the jobkeeper payment.
I have an employee who is refusing to work and wants to be paid the jobkeeper payment. What do I do?
Proceed with caution.
You may be able to establish that an employee is not complying with a lawful and reasonable direction to perform work and take disciplinary action. However, be mindful that a number of the temporary provisions to the Fair Work Act 2009 (Cth) (such as the benefit that an employee of an employer has or derives because of an obligation of the employer to satisfy the wage conditions) are workplace rights.
We recommend you seek advice.
What do I do if there continues to be a decline in business and I need to make employees redundant. Can I do this when I am receiving jobkeeper?
Yes. However, you can only receive (and the employee will only be eligible for) jobkeeper until their employment is terminated.
Jobkeeper payments are for those employees who remain employed with your entity (even if stood down) and are administered by employers and the ATO for eligible employees.
Jobseeker payments are for those employees who are not employed and is provided by Services Australia directly to employees.
Employees will not be eligible if they are totally incapacitated, unable to work and being supported by a workers compensation scheme.
Employees with a partial incapacity for work and who are receiving workers compensation for that partial incapacity are not excluded.
Currently, Jobkeeper payments will cease on 28 September 2020.
No. The ATO and the Treasurer have said that once an employer decides to participate in the JobKeeper scheme and their eligible employees have agreed to be nominated by the employer, the employer must ensure that all of these eligible employees are covered by their participation in the scheme.
This includes all eligible employees who are undertaking work for the employer or have been stood down.
The Treasurer has said that this will be made clearer in the rules.
Yes. Provided they meet the other aspects of the eligibility test (for example, they are 16 years of age or older) they meet the definition of an eligible employee and are entitled to receive the jobkeeper payment. Unless they are receiving parental leave pay under the Paid Parental Leave Act 2010 (Cth).
An employee has not accepted the jobkeeper nomination, can I reduce their hours or change their duties?
No. If you are not receiving the jobkeeper payment for them you cannot issue the jobkeeper enabling directions (or requests).
In respect of the fortnight you must pay, not less than the greater of:
- the $1,500 jobkeeper payment; or
- the amounts payable to the employee in relation to the performance of work during the fortnight.
If you would like to discuss this further and the implications for your business please contact our Employment + Workplace Relations Partner, Erin Lynch.
Erin Lynch, Partner
M +61 477 330 202