JobKeeper payment passed in Parliament
On Wednesday 8 April 2020, Parliament passed the Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 and the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020
The first of these measures authorises the introduction of the “JobKeeper” scheme, which will provide wage subsidies of $1500 per fortnight for workers whose jobs and income have been affected by COVID-19 and the measures taken to contain its spread.
The second, among other changes, amends the Fair Work Act 2009 (Cth) (the FW Act) to give employers who are eligible for JobKeeper support greater flexibility to manage employees’ hours, location and duties without their consent. It also allows those employers to more readily reach agreement with employees on the taking of annual leave.
We outline below the key aspects of what this could mean for your business:
Payment of JobKeeper Rebate
- Eligible businesses will have amounts in the bank from early May, backdated to payroll periods beginning on Monday 30 March 2020
- ATO will credit the JobKeeper rebate into your nominated bank account where any tax refunds have been previously sent
- Payments will be made to the employer monthly in arrears
- Payments will NOT be offset against any outstanding tax amounts
- If you are overpaid, and it is an honest mistake, the Commissioner has the discretion and may not require you to pay back
- $1,500 gross payment (before tax) to be paid in each a fortnight period, beginning Monday March 30.
- Normal salaries and also bonuses, loading, allowances, overtime/penalty, leave payments are all eligible salaries that can be counted towards the $1,500 per fortnight of JobKeeper payments
- Pay rates cannot fall below what was being paid prior to JobKeeper
- Employee hours can be reduced to match the $1,500 JobKeeper payment (must provide written notice, 3 days in advance)
- No superannuation guarantee payments are required to be paid on any additional payment made because of the JobKeeper Payment
- Employees accrue leave as normal during stand-down periods and through the JobKeeper period
- Paid annual leave can be taken for twice the length and at half the pay rate, and still attract the JobKeeper payment – annual leave is accrued at the full rate, as though the annual leave was being taken at the full rate.
- Subsequent redundancy payments or payments in lieu of notice are calculated as normal and as though full uninterrupted service had been given by the employee
- The amendments to the FW Act do not permit an eligible employer to direct an eligible employee to take annual leave. However, employers can request employees who are eligible for JobKeeper payments (eligible employees) to take annual leave, so long as complying with the request will not result in the employee having a balance of paid annual leave of fewer than 2 weeks. Employees must consider such requests, and cannot unreasonably refuse a request. Importantly, consultation obligations also apply.
- You must inform your employees in writing if they are part of your business’ JobKeeper subsidy
- JobKeeper payments are exempt from income tax for the business
You can access further detailed information on the Australian Parliament House website:
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.