JobKeeper Payment & Direction Knowledge Base

On 30 March 2020, the Federal Government announced a further round of support for employers and their employees with the introduction of a JobKeeper Payment, as a subsidy to help businesses impacted by the Coronavirus (COVID-19) epidemic in keeping people employed.

Eligible 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.

When legislation to support this was passed by the Federal Government on 8 April 2020, further amendments were also made to address inflexibility within the Fair Work Act and has enabled employers with unprecedented powers to vary employment terms on a unilateral basis in order to reasonably manage their business and workforce during this period.

 

This page has been updated on 29 April 2020 to reflect changes announced by the ATO which allow employers with more time to transition into the JobKeeper scheme.

 

Table of Contents – JobKeeper Payment & Direction Knowledge Base

Eligible Employers for the JobKeeper Payment & Directions

Eligible Employees for the JobKeeper Payment

Eligible Business Participants for the JobKeeper Payment

JobKeeper Direction

Extension of time to enrol for the JobKeeper scheme

JobKeeper Payment FAQs

JobKeeper Direction FAQs

JobKeeper Payment & Direction resources

Key dates for the JobKeeper scheme

 

Eligible Employers for the JobKeeper Payment & Directions

Employers will be eligible for the subsidy and directions if:

  • their business has a turnover of less than $1 billion and their turnover has fallen by more than 30% (of at least a month); or
  • their business has a turnover of $1 billion or more and their turnover has fallen by more than 50% (of at least a month); and
  • the business is not subject to the Major Bank Levy.

 

Further consideration has been given to charities registered with the Australian Charities and Not-For-Profit Commission (ACNC) and they will be eligible for the subsidy if they estimate their turnover has or will likely fall by 15% or more relative to a comparable period.

To establish that a business has met the above criteria, they will be expected to establish that their turnover has fallen in the relevant month or 3 months (depending on the natural activity statement reporting period of that business) relative to their turnover a year earlier.

The Tax Commissioner will have the discretion to set out alternative tests that would establish eligibility in specific circumstances.

 

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Eligible Employees for the JobKeeper Payment

Eligible employees are employees who:

  • 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.

 

Not sure where to start? Download our Payroll Guide To The JobKeeper Payment.

Download the free Payroll Guide To The JobKeeper Payment by Employment Innovations

 

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Eligible Business Participants for the JobKeeper Payment

An individual may also be entitled to be included if they:

  • were not employed by the eligible employer;
  • are either a sole trader, partner, beneficiary or director of the eligible business;
  • 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.

 

The individual cannot be an employee (other than a casual employee) of any other entity. Each eligible employer is only able to nominate one business participant, even if multiple individuals qualify.

 

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JobKeeper Direction

Any employer who qualifies for the JobKeeper Payment subsidy will also be able to give a JobKeeper Direction to an employee which have the effect of varying the employee’s terms of employment on a unilateral basis.

This can include a broad discretion in relation to hours of work, timing of work, location of work, the taking of annual leave, and the allocation of work tasks.

Importantly, JobKeeper directions will prevail over any existing employment terms under a contract, award, or enterprise agreement.

 

Need to know more? Why not read our Guide to giving JobKeeper Enabling Directions or you can download our free JobKeeper Enabling Directions letter templates to use within your business.

Get JobKeeper ready with our downloadable JobKeeper Directions letter templates

 

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Extension of time to enrol for the JobKeeper scheme

The Tax Commissioner has announced an extension to enrol for the initial JobKeeper periods, from 30 April 2020 until 31 May 2020.

If employers enrol by 31 May they will still be able to claim for the fortnights in April and May, provided they meet all the eligibility requirements for each of those fortnights. This includes having paid employees by the appropriate date for each fortnight.

For the first two fortnights (30 March to 12 April & 13 April to 26 April), it will be accepted that the minimum $1,500 payment for each fortnight haves been paid by employers even if it was paid late, provided it is paid by 8 May 2020. If staff are not paid by this date, employers will not be able to claim JobKeeper for the first two fortnights.

Note: Employers can enrol and claim for JobKeeper earlier if they choose. For example, employers can still enrol by the end of April to claim JobKeeper payments for the two fortnights in April.

 

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JobKeeper Payment FAQs

Simply click on each frequently asked questions below in order to expand and view the answer.

Q. What is the difference between JobKeeper and JobSeeker Payments?

A. JobKeeper Payments are administered by employers and the ATO for eligible employees. JobSeeker is provided by Services Australia directly with individuals who are without work, or have had their income impacted.

Q. How do I apply as an eligible employer?

A. Employers can use their MyGovID account to access the ATO Business Portal to register their business on or after the 20 April 2020. The Australian Tax Office (ATO) deadline for applying into the scheme from the first fortnight commencing 30 March 2020 has been extended to 31 May 2020.

Q. What if our business has changed hands during the last 12 months?

A. The ATO may need to consider an alternative test to determine employer eligibility for the JobKeeper Payment in regard to turnover.

For employees who were employed by the previous owner and transferred employment to the new owner, prior service will count as far as their eligibility is concerned.

Q. How do I determine if my casuals are employed on a “regular and systematic” basis?

A. A casual is likely to be considered “regular and systematic” if they have had a recurring work schedule or a reasonable expectation of ongoing work. Hours may vary from week to week and it can still be deemed “regular and systematic”.

Also, breaks in service such as for seasonal workers may also NOT disqualify an employee from this definition as the employer’s system requires them to work in that fashion. You would likely have to demonstrate that there is an expectation of ongoing work.

Q. What are my obligations to employees subject to the subsidy?

A. You will need to notify your eligible employees that you will be claiming the JobKeeper Payment. You will also need to provide your eligible employees with a JobKeeper Employee Nomination Notice (ATO Form) and they are required to complete and return this to you. Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.

Employers have been granted the flexibility to ensure any payment to eligible employees from 30 March 2020 can be made up until 8 May 2020 (*extended from 30 April 2020). If you make payments after this date you will not be eligible for the JobKeeper Payment for that employee for the first 2 fortnights of the scheme.

After this period, employers are required to pay employees in accordance with their normal pay cycle, at least $1,500 per fortnight, or the equivalent of this if the pay period is weekly or monthly.

Q. What if I have employees who have been stood down without pay?

A. You have the option to register and process the JobKeeper Payment to employees stood down from work without pay. However, eligible employers will not receive the $1,500 gross per eligible employee per fortnight until the first week of May 2020. This can include backdated payments to cover the period commencing from 30 March 2020.

Employers are required to make payments to eligible stood down employees throughout April (i.e. before the employer has in fact received any payment from the Government), however it is also possible to backpay the employees from when the scheme commenced on 30 March 2020.

Eligible employers will continue to report monthly to the ATO in order to receive the subsidy for the previous month.

Q. How will the ATO determinate if I have paid my eligible employees and when will the employer be reimbursed?

A. The ATO will be relying on Single Touch Payroll (STP) information to validate eligible employees and ensure they have been paid by the employer. If you do not use a STP compliant payroll solution, the ATO will accept manual reporting via their portal.

Whilst the ATO have made statements confirming that the first payment will be made in the first week of May, the legislation states that the ATO has up to 14 days after the completion of each monthly period to make JobKeeper Payments to eligible employers for the prevous month.

Q. How much will I be reimbursed each month?

A. The JobKeeper Payment will be limited to $3,000 per eligible employee and/or business participant each month from May to October, except for September which will represent up to $4,500 per eligible employee and/or business participant for the previous month.

Q. What if I as the employer (or my employee) is deemed ineligible for JobKeeper Payment and I have topped up wages to $1,500 per fortnight prior periods?

A. It may be possible to treat these additional payments as overpayment errors – as you have mistakenly paid something that the employee was not entitled to. Employers are not permitted to take money out of an employee’s pay to fix up a mistake or overpayment.

Instead, the employer and employee should discuss and agree on a repayment arrangement.

Q. Am I obliged to register if I am an eligible employer?

A. No. It may not be practicable for your business to commit to the above obligations.

Q. Is the JobKeeper Payment to employees taxable?

A. Yes.

Q. Are we required to pay superannuation in addition to the JobKeeper Payment?

A. Superannuation is not required to be paid for the amount supplemented by the Government if the employee is not working. If the JobKeeper Payment is supplementing a salary or wages for work performed, super is payable on the salary or wages – as it would normally be.

Q. If an eligible employee is on any form of paid leave do I still receive the full subsidy for the employee?

A. Yes. However, if an eligible employee is receiving paid leave such as Parental Leave or Dad & Partner Pay in the fortnightly period they are ineligible for the JobKeeper Payment in that fortnightly period.

Q. Are eligible employees currently unable to work and on workers compensation eligible for JobKeeper Payment?

A. No. If an eligible employee is totally incapacitated and is in recept of workers compensation payments in the fortnightly period they are ineligible for the JobKeeper Payment in that fortnightly period.

Q. Can I re-hire an eligible employee who was employed at 1 March 2020 that I terminated since?

A. Yes. The scheme is designed to encourage employers to re-hire employees that may have been terminated, such as those made redundant.

This can only be done with mutual agreement with the employee – and this can be on any terms that are deemed satisfactory to both parties (including pay, role, etc.). The parties may also need to agree on terms requiring the repayment of any termination pay.

Q. If I have eligible employees earning less than $1,500 a fortnight, before tax, should I be topping the employee’s pay up to $1,500 a fortnight, before tax under this arrangement?

A. Yes. However, the top-up amount will not be subject to superannuation.

Q. If I have eligible employees earning less than $1,500 per fortnight, before tax, can I increase their hours to match the minimum payment?

A. You do have that flexibility for eligible casual employees however in regards to part-time employees this would be subject to specific terms in the Award or employment contract and it may require agreement with the employee to enforce.

Q. What if my employees are refusing to work and assume they will be paid the JobKeeper Payment even if they are not working?

A. Employees who do not follow a reasonable and lawful instruction from their employer to work or who are unable to provide a satisfactory reason as to why they cannot perform work (such as personal leave) can be disciplined up to termination of employment. Seek professional advice if considering such actions.

Q. If employees have already agreed to a reduction in pay prior to the introduction of JobKeeper is there a requirement to return to their original pay rate?

A. No. The only requirement is that the employee is earning at least $1,500 per fortnight. But it may be fair and equitable to review these arrangements in consideration of the JobKeeper Payment.

Q. What happens if our business continues to further decline and we wish to make an eligible employee redundant. Can we do this if they are receiving the JobKeeper Payment?

A. Yes. But the employee will only be eligible for JobKeeper up until their termination.

Q. When do JobKeeper Payments cease?

A. At this stage, JobKeeper Payments will cease on 28 September 2020 to eligible employees.

JobKeeper Direction FAQs

Simply click on each frequently asked questions below in order to expand and view the answer.

Q. Which employees am I able to make JobKeeper Direction in relation to?

A. All employees that you receive the JobKeeper payment in relation to.

Q. Can I reduce the hourly rate of pay for my employee under a JobKeeper Direction?

A. No. The employee’s rate of pay cannot be reduced, for the hours which they actually work once a direction has been given.

Q. Can I reduce or change the hours that an employee works under a JobKeeper Direction?

A. Yes. You can give an “enabling stand down direction” to work fewer hours or days when they cannot be usefully employed for their normal hours due to business changes caused by the pandemic or government initiatives.

Employees will not be entitled to be paid for the times where they are not working, subject to the rule that they must be paid at least $1,500 per fortnight before tax (i.e. the amount of the JobKeeper payment).

Employees and employers under JobKeeper will also be able, “despite any limitations in a designated employment provision” (e.g. an award) to come to an agreement about working different days and times outside of ordinary hours.

Q. Does the calculation of the minimum amount to be paid to employees ($1,500 per fortnight) included payments for leave?

A. Yes – so long as the employee is paid at least $1,500 per fortnight, through leave payments, overtime payments, allowances, etc the employer will have met their obligation.

Q. Can I direct an employee to perform different duties or perform work in a different location?

A. Yes. You can direct employees to undertake different duties and perform work in a different location (including work from home), so long as the directions are reasonable, safe and within the employee’s ability.

Q. How do I go about enforcing a JobKeeper Direction?

A. Employees must be consulted with about any proposed changes and employees must be given a  written direction of the changes with at least 3 days’ notice.

Q. What is considered a “reasonable” JobKeeper Direction?

A. The employer can only give a direction if the affected employee cannot usefully be employed for their normal hours and normal activities during the period of the direction. The direction must ensure work can be performed safely, and within the employee’s skills and competencies.

Q. Does a JobKeeper Direction include forcing an employee to take annual leave?

A. Yes. An employer can ask the employee to take annual leave and the employee cannot unreasonably refuse. However, if leave is taken the employee must retain a leave balance of at least 2 weeks. Annual leave can be subsidised by JobKeeper Payments.

Employees and employers under JobKeeper will also be able, “despite any limitations in a designated employment provision” to come to an agreement about taking double the amount of annual leave, paid at half pay.

Q. What happens to accrual rules if an employee has any employment arrangements changed under these new rules?

A. The employee continues to accrue as if no direction or agreement has been made under these new rules.

Q. What happens when employees have had their arrangements changed by a JobKeeper Direction (for example, reduction of hours) and they take leave, such as annual leave or personal/carer’s leave?

A. Leave operates as if there was no JobKeeper direction in place, i.e. if a full-time employee has had their days reduced to one day per week and they take a week of leave, they will still be paid for a full week.

Q. Can I issue a stand down on a public holiday that an employee would normally have been absent from work and paid?

A. No. This means that an employee should still be paid for any public holidays as normal if they would have been absent from work and paid prior to the stand down.

The JobKeeper Payment can subsidise wages paid on public holidays, but these wages would be subject to normal on-costs (such as superannuation).

Q. If there are specific terms in an Award or Agreement in regard to exercising a stand down direction am I required to follow them?

A. No. If you are eligible to exercise a JobKeeper Direction you will not need to follow specific terms in an Award or Agreement in relation to that process (including the recent changes to some awards in this area).

Q. When does JobKeeper Direction cease to apply?

A. At this stage, a JobKeeper Direction to an eligible employee will cease on 28 September 2020.

JobKeeper Payment resources

Employment Innovations | JobKeeper Enabling Directions letter templates

 

Government websites

Treasury.gov.au | JobKeeper Payment

Business.gov.au | JobKeeper Payment for employers and employees

Business.gov.au | JobKeeper Payment for sole traders

 

Government Fact Sheets

JobKeeper Payment | Frequently Asked Questions

JobKeeper Payment | Information for employers

JobKeeper Payment | Information for employees

JobKeeper Payment | Changes to the Fair Work Act

JobKeepr Payment | Protecting Integrity

 

Government Tools

You may choose to create your own employee nomination notice instead of using the JobKeeper employee nomination notice if it is not practical to have each employee complete and return the ATO version to you.

ato.gov.au | Creating your own employee nomination notice

 

Got further questions about JobKeeper Payment & Directions?

If you would like to understand whether your business can take advantage of the JobKeeper Payments, in addition to how they might impact your payroll – why not book a free 30 minute consultation with one of our Payroll experts?

 

Need JobKeeper Payroll Help? Book a free 30 minute 1:1 JobKeeper advisory session with a Payroll expert!

 

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Key dates for the JobKeeper scheme

 

30 March 2020 First day of JobKeeper scheme
20 April 2020 Enrolment in JobKeeper commences
8 May 2020 Last day to make back payments to employees to be eligible from 30 March
31 May 2020 Last day to enrol in JobKeeper from its commencement
27 September 2020 Last day of JobKeeper scheme

 


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About Employment Innovations

Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.

Disclaimer

The information provided in these knowledge base articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.

 

The coronavirus COVID-19 pandemic will continue to change over the coming weeks and we recommend following the advice of State & Federal governments & health authorities. This article about the Government’s JobSeeker Payment was originally published on 1 April 2020 and last updated on 30 April 2020.

 

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