New Stimulus Package – Now You Can be a JobKeeper instead of a JobSeeker – SUMMARY
By Michael Fox, Art Accountant & Valuer.
In the future, two new government programs will become associated with COVID-19.
First, JobSeeker, announced little more than a week ago, allowed people to apply to Centrelink to receive unemployment benefits and a tax-free Coronovirus supplement, to a maximum amount of about $1,100 per fortnight. The Coronavirus supplement is not taxable income.
And now, JobKeeper, unveiled at 5pm last night, to retain employees and pay benefits to sole traders, for businesses whose turnover has been affected by the current health crisis.
JobKeeper is currently a government policy announcement that has not been legislated. The advice provided today is based only on the information that has been made available by Treasury and the ATO, but a brief summary of the scheme is as follows:
The program will run for 6 months;
-It will apply to businesses, including sole traders, partnerships and trusts, established between 1 March 2019 and 1 September 2019;
-Eligible businesses must see a fall in turnover of 30% in any month between March and September this year compared to a year ago;
-Eligible employees are full-time and part-time workers as well as casual employees that have been employed for at least 12 months by one employer;
-If a worker had been let go since 1 March and they otherwise qualified as an eligible employee, they may be rehired;
-Eligible employees will receive $1,500 per fortnight, which is taxable income, from eligible employers; and
-Subsidy payments from the government to eligible employers will start from the first week of May and will be backdated to 1 March.
In relation to the last point, many self-employed artists, writers, musicians and film and television professionals may only start to see their income fall by more than 30% compared to a year ago, from April. If that is the case, subsidy payments may not be forthcoming until the first week of June.
As announced, an eligible employee currently earning less than $1,500 per fortnight will be paid $1,500 per fortnight under the scheme. The employer is not allowed to pocket the difference. It should also be noted that superannuation liabilities for employees will continue for their ordinary time earnings.
You can only receive one JobKeeper payment and you cannot receive JobSeeker and JobKeeper at the same time. As an example, John is employed on a permanent part-time basis by an engineering firm and he plays in a band on the weekend as a sole trader.
If the engineering firm is eligible for the JobKeeper subsidy, he may continue to receive his wages from them to a minimum amount of $1,500 per fortnight; or if he qualifies as a sole trader musician and the engineering firm does not, he may receive a JobKeeper payment direct from the government.