Things have moved exceptionally quickly. Before there was a chance to digest the first two rounds of stimulus, they have been have swamped by the third.
The key points are here. The full overview is below.
How Much?
$1500 fortnightly payments for every employee on the books since March 1.
The entire scheme will cost $130bn.
Eligibility
Full-time and part-time workers, casuals who have served more than 12 months, New Zealanders on category 444 visas.
Businesses and sole traders who have suffered a 30 per cent decline in turnover since March 1.
Businesses with $1bn+ turnovers that have suffered a 50 per cent decline since March 1.
How It Works
JobKeeper payments available now. ATO will reimburse businesses in the first week of May through monthly arrears.
Commentary
This should alleviate the need to dip into superannuation for many people. Interestingly, the $1500 payment may be more than some workers were being paid. As the previous superannuation announcement required a 20% decrease in wages or a job loss, it seems with a job held and the decrease in wages criteria not met, there will be no access to superannuation in those instances. A relief for some superannuation funds!
Hopefully the increased payments and stimulus can save a lot of people and keep businesses at least able to start back quickly when the time comes.
There is the large matter of the debt. At the moment the spend sits at $319 billion or $204 billion if you discount the RBA’s debt facility. And this might not be the end. The legacy of tax could be hair-raising, and the cuts eventually made, heart-stopping. Notably, borrowing is cheaper than ever before. If properly navigated, it may be manageable.
Then our savings. We’ve all seen the surveys that would routinely appear in the media. Two thirds of the population walk around without emergency savings. Half couldn’t find $1000 in a crisis. Whatever the statistic, here’s the crisis and it’s all true. We have the second highest household debt in the world, but no ready access to savings. Neither side of politics has made any attempt to address it. Both preferring to look away as debt increases and cheer as house prices rage higher, while leaning on regulators who might crimp lending.
At the moment, stimulus provides a stay of execution.
JobKeeper Payment Full Details
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.
Employers
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).
- 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.
Employers will be eligible for the subsidy if:
- their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
- their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
- the business is not subject to the Major Bank Levy.
The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.
Employees
Eligible employees:
- are currently employed by the eligible employer (including those stood down or re-hired);
- were employed by the employer at 1 March 2020;
- are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020)
- are at least 16 years of age;
- are an Australian citizen, the holder of a permanent visa, 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.
Application
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.
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.
This represents general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs.
