The government’s Jobkeeper legislation has now passed parliament. Jobkeeper provides eligible employers $1,500 per fortnight for each eligible employee for up to six months from the 30th of March 2020.
Am I Eligible?
This will depend on whether your employer or business has had their turnover reduce by enough to qualify. This article focuses on employee eligibility. For more information on whether your business is eligible please read our article "Is my business eligible for a JobKeeper Payment"
To be eligible, your employer (including not-for-profits) will need to show that:
- their business has an annual turnover of less than $1 billion and they estimate their turnover has fallen or will likely fall by 30 per cent or more; or
- their business has an annual turnover of $1 billion or more (or is part of a consolidated group for income tax purposes with turnover of $1 billion or more) and they estimate their turnover has fallen or will likely fall by 50 per cent or more; and
- their business is not subject to the Major Bank Levy
Charities registered with the Australian Charities and Not-For-Profit Commission (ACNC) will be eligible for the subsidy if they estimate their turnover has or will likely fall by 15 per cent or more relative to a comparable period.
Where an employer has been in operation for less than a year or where their turnover last year was not representative of their usual turnover, the Tax Commissioner will have discretion to consider additional information to prove eligibility. An example given by the treasurer for a business that started less than a year ago is to compare their average turnover across all of the period since they started with their turnover in the current period.
If your employer has changed ownership, it wont affect your eligibility.
Employers must elect to participate in the scheme. They will need to make an application to the Australian Taxation Office (ATO) and provide supporting information demonstrating a downturn in their business.
If your employer is eligible for JobKeeper, you will be eligible for a payment if you were on their books on the 1st of March 2020 and continue to be engaged by that employer if you are a full-time, part-time, long-term casual or stood down employee. Casual employees eligible for the JobKeeper Payment are those employees who have been with their employer on a regular and systematic basis for at least the previous 12 months as at 1 March 2020. A casual employee is likely to be employed on a regular and systematic basis where the employee has a recurring work schedule or a reasonable expectation of ongoing work. Casual employees will not later become eligible for the scheme once their service duration passes 12 months. The test is at 1 March 2020 only.
If you have been stood down by your employer before the commencement of this scheme, you can be re-engaged by a business that was your employer on 1 March 2020 and still be eligible.
To be eligible, you must be an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder as at 1 March 2020. You must also be a resident for Australian tax purposes and aged 16 years or older on 1 March 2020. If you are receiving paid parental leave you are ineligible during the period you are receiving paid parental leave. If your employer elects to participate in the JobKeeper scheme, they cannot select which eligible employees will participate in the scheme. It is a one in, all in scheme.
To receive a JobKeeper payment you must sign a JobKeeper employee nomination notice to your employer agreeing:
- to be nominated by the employer as an eligible employee under the JobKeeper scheme
- that you confirm you have not agreed to be nominated by another employer and
- that you do not have permanent employment with another employer if you are employed as a casual employee with this employer
How do I choose which employer to nominate?
Where you have multiple employers, you are only eligible to receive a JobKeeper payment from your primary employer. Where you have a permanent position (either full time or part time), you are ineligible to nominate a casual employer. Where you have more than one permanent employer, you are free to nominate any one of those employers to receive the JobKeeper payment. Where you have no permanent employer you can nominate any one of your casual employers to receive the JobKeeper payment.
Which employer you choose to elect is important. There is potential for great conflict in making this choice. If you choose an employer who you are currently working hours for, they obtain a benefit from the scheme. If you choose an employer who has stood you down, unless you are on leave, the employer receives no benefit and in fact has a cost to participating in the scheme. Therefore when making your choice you need to be careful to consider how it will impact on your relationship with your employer and your future employment prospects.
If you have multiple employers and are eligible to elect an employer that you receive less than $1,500 per fortnight from, you will receive $1,500 per fortnight from that job plus whatever other employment income you earn from other employers.
If however you choose to claim JobKeeper from an employer from which you earn more than $1,500 per fortnight, then you will not receive any extra payments in your hand, rather your employer will receive the benefit, possibly helping them to continue to employ you. You also need to consult your employer to see if they are likely to be eligible for the scheme as not all employers will be eligible. Also some employers may not be willing or able to apply for JobKeeper as the scheme requires employers to pay the amounts to employees before they are later reimbursed by the Government.
You earn the following fortnightly amounts from two employers on a casual basis:
If you choose Employer A to receive the JobKeeper payment, you will continue to receive $2,000 per fortnight.
If you choose Employer B to receive the JobKeeper payment, you will receive $1,500 per fortnight from Employer B plus $1,800 per fortnight from Employer A. This is a pay increase for you up to $3,300 per fortnight. It should be noted that if you do choose Employer B, then Employer A is not going to be happy as you have cost them $1,500 per fortnight. If you choose Employer A, Employer B may not be so unhappy as they were only going to receive a $200 benefit from your choice. Therefore it is important to discuss your choice with your employers to ensure you maintain a healthy employment relationship.
Once you have made a choice and received payments, your choice is final. You cannot nominate another employer for any reason. If your employment relationship ends with the employer you are claiming the JobKeeper payment through, you will not be eligible to receive JobKeeper again.
If you nominate more than one employer to receive the JobKeeper payment, you will forfeit any right to any JobKeeper payments for the entire length of the JobKeeper scheme. In these circumstances, if you have received any payments, you will be required to pay them back to the ATO along with interest and penalties.
How do I receive the JobKeeper Payment?
Employers must pay eligible employees at least $1,500 per fortnight, before tax. If an employer ordinarily pays employees monthly they can continue to do so but must ensure that $3,000 is paid for every four week period. The method of payment means that employers will need to fund up to three fortnights of payments to employees out of their own funds before getting reimbursed by the Government, putting further pressure on already cash strapped businesses.
If you would normally receive less than $1,500 per fortnight, you must be paid at least $1,500 per fortnight before tax. If you would normally receive more than $1,500 per fortnight, you must be paid your normal entitlement for hours worked. However, if you normally earn more than $1,500 per fortnight, your employer may be able to give a JobKeeper enabling direction that effectively reduces your pay to $1,500 per fortnight if you cannot usefully be employed for your normal days or hours during the JobKeeper enabling stand down period because of business changes attributable to the Coronavirus pandemic. The reduction must be achieved through a reduction in hours or days worked as your hourly rate or annual salary cannot be reduced. This temporary change to the Fair Work Act is available to employers who qualify for the JobKeeper scheme and also enables an employer to:
- give a direction to an employee about the nature of the employee’s duties, within their skill and competency or to perform duties at a place different from their normal place of work, including the employee’s home
- give a direction to an employee to work different days or at different times compared with the employee’s ordinary days or times of work
- request an employee to take paid annual leave, including at half pay (half pay doubles the period of leave). An employee must consider (and must not unreasonably refuse) their employer’s request to take annual leave, provided that the leave arrangement would not result in reducing the employee’s leave balance to fewer than two weeks.
An employee does not have to comply with a JobKeeper enabling stand down direction if it is unreasonable in all the circumstances and a JobKeeper enabling stand down direction does not apply while an employee is taking paid or unpaid leave authorised by the employer (for example, annual leave), or is otherwise authorised to be absent (for example, on a public holiday). Therefore regular pay must continue on these days.
JobKeeper enabling directions must be in writing which could include by electronic means.
During a period when you are subject to a JobKeeper enabling direction, the period counts as service and regular leave entitlements are accrued. Therefore if you are employed by a business that is shut down and you are receiving JobKeeper payments, you continue to accrue entitlements for annual, sick and long service leave where applicable.
The temporary changes to the Fair Work Act also enable you to ask your employer who qualifies for the JobKeeper payment scheme in a range of circumstances for permission to engage in reasonable secondary employment, training or professional development. Your employer is required to consider and not unreasonably refuse any such request.
No superannuation guarantee payments are required to be paid for you on any additional payment made because of the JobKeeper Payment. Super guarantee obligations only arise in relation to wages earned by actually working. For example, if a persons wage would ordinarily be $1,000 per fortnight for the hours they have worked, there is no obligation for the employer to pay super guarantee on the extra $500 required for the JobKeeper payment. If an employee has been stood down and then paid JobKeeper there is no super contribution required.
You can elect to salary sacrifice part or all of the JobKeeper payment.
The subsidy commences on 30 March 2020 with the first fortnightly pay period ending on the 12th of April. The final pay period ends on the 27th of September 2020. To be eligible for payments from the 30th of March your employer needs to register and backpay any underpaid amounts by the 30th of April. After the 30th of April, all payments will be made in your normal pay cycle.
Anyone who receives a JobKeeper payment will not be eligible for a JobSeeker payment for that period. If you are not eligible for JobKeeper, you may be eligible to apply for JobSeeker through Centrelink. The maximum entitlement for JobSeeker is around $1,100 per fortnight which is about $400 less than if you were eligible for JobKeeper.
JobKeeper is not income tested so you may earn additional income without your payment being affected as long as you are eligible and maintain your employment (including being stood down) with your JobKeeper-eligible employer. However, you can only receive the JobKeeper payment from one employer, your primary employer.