Prime Minister Scott Morrison and Treasurer Josh Frydenberg MP today announced the third tranche of stimulus measures in response to the COVID-19 outbreak – a $130 billion wage subsidy to approximately 6 million employees.
Under this scheme, businesses will receive $1500 per fortnight, per employee, which will be paid through the Australian Taxation Office (ATO). The Prime Minister and Treasurer named the scheme “uniquely Australian”, as it is broader than the UK scheme, more generous than the NZ scheme and available to a greater range of businesses than the Canadian scheme.
The three economic stimulus packages that have been announced since the outbreak of COVID-19 total more than $320 billion, or 16.4 per cent of GDP.
The ‘JobKeeper’ payment applies to all workers equally. It is a flat payment that represents approximately 70 per cent of the national median wage and 100 per cent of the median wage in those sectors most heavily affected by the coronavirus outbreak, such as tourism, retail and hospitality.
It will be paid to businesses from 1st May 2020, but will be backdated until today. All eligible employees will receive the same payment.
Sectoral and Business Eligibility
– Applies to both small and large employers
– Determined by loss of turnover. Business must have seen turnover fall by 30 per cent. If the turnover of a business exceeds $1 billion, the business will have to demonstrate a fall of 50 per cent.
– Includes businesses structured through companies, partnerships, trusts and sole traders
– Not-for-profit entities, including charities, are also eligible
Businesses are encouraged to begin paying their staff immediately and will be reimbursed from the first week of May.
Eligible businesses can apply for the payment online and register their interest via https://www.ato.gov.au/.
– Full time and part time workers
– Sole traders
– Casual worker who has been employed by the same employer for over 12 months
– An employee is only eligible to receive the payment from one employer
– Self-employed individuals are also able to receive this payment
– Will apply to all employees who were on the books as of 1st March
Distributing Payment to Employees
The payment with be delivered through the ATO. Whilst employers are legally obliged to pass on the payments to their employees, the ATO will use the single touch payroll system to ensure that this is happening in all cases.
– Recipients cannot be on both the JobSeeker payment and the JobKeeper payment, employers will be able to elect which program is best for individuals
– There is no superannuation guarantee levy on the JobKeeper payment
– Excludes people on temporary work visas, but includes New Zealanders who possess a subclass 444 visa.
Changes to the JobSeeker Payment
The Prime Minister and Treasurer also announced extended arrangements for the JobSeeker payment. The threshold for the ‘Partner Pay Income Test’ will now be raised from $48,000 per annum to $79,762 per annum, in order to allow more people to access the payment.