Wage Subsidy For Businesses Affected by COVID-19
Last Monday saw the Covid-19 pandemic move from a health crisis to an economic crisis for Australia. We are in uncharted waters with many jobs and businesses lost already. The federal and state Governments have responded with a number of assistance schemes, reliefs and other packages to support industries, businesses and individuals. Last Wednesday, we published a comprehensive list of these and thankfully the economic stimulus strategies keep coming.
Similar to the strategy to flatten the curve for the virus, the Governments have adopted a strategy to assist business to survive while we get through this then we can rebuild. One of the biggest outlays for business is employee costs and the Government does not want to see a substantial increase in unemployment. Further to this, they are aware that without good staff businesses will not be able to rebuild after the virus has been stopped.
To assist in this strategy the Prime Minister yesterday announced a new initiative to assist employers in retaining their staff, the “JobKeeper Payment”.
Please note information remains scant on this initiative and the legislation has not yet been drafted so stay tuned and we will keep you informed as soon as we know more.
In summary, the following is proposed:
- The JobKeeper payment is intended to provide wage subsidies to businesses that are significantly affected by COVID-19*
- The Government has announced its intention to pass additional legislation to introduce this new measure.
- If legislation is enacted, support will be directed to employers to pass on to employees.
- $1500 per fortnight per employee JobKeeper payment, to help employers to keep in businesses.
- This is a flat payment equivalent of around 70% of the median wage.
- Applicable to full & part time workers, sole traders, and long-term casuals (who have been with employer for 12 months or more at 1st March 2020).
- Workers employed as of 1st March.
- Payments from 1st week of May, backdated to 30/03/2020 and delivered via ATO.
- Employers are still eligible if staff have been already laid off post 1 March 2020.
- Applies to all employees not just these stood down back to 1st March.
- Superannuation is not payable on the $1500
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)
For more information download the fact sheet here https://treasury.gov.au/coronavirus/businesses
If this is applicable click here to register your interest here https://www.ato.gov.au/general/gen/JobKeeper-payment/
To stay up to date with the latest changes and to find out how they apply to you and your business check out our COVID-19 Business Hub here. If you would like any assistance or clarity about this or any other announcement please don’t hesitate to contact us.