In response to the economic impact of the Coronavirus, the Government announced the next round of their stimulus measures yesterday afternoon.
The changes include some key measures for both individuals and employers.
Below is an overview of the initiatives and changes that may help you.
During these uncertain times, professional financial advice is even more important. Remember that we are here to help and support you during this period. Please feel free to contact our office on 03 9999 4100 and we will be happy to assist as always.
Those Looking For Work (JobSeeker)
The government has previously announced a number of key measures for those who are now looking for work, either prior to or as a result of the Coronavirus pandemic. As part of yesterdays announcement, and following criticism leveled at the government over the past few weeks, a key change was made to the income test for the JobSeeker payment.
The key change was that for couples, the income test for the payment has now increased from $48,100pa to $79,762pa, therefore ensuring more people are eligible to access the payment.
An important note on this however is that the payment naturally tapers down as a couples income increases so if a couples income was around the $79,000 mark, their entitlement would naturally be quite small (not the full amount).
As previously advised, a Coronavirus supplement ($550 per fortnight) is also payable for the next 6 months for a person in receipt of the JobSeeker payment. This supplement commences on 27 April 2020 and when combining the JobSeeker payment with this Coronavirus supplement, the maximum fortnightly payment for a single is $1,115.70 or $1,060.80 for a member of a couple.
Those Stood Down From Work/Had Their Working Hours Reduced (JobKeeper)
As part of yesterdays announcements, a new payment has been introduced for both employers and employees, known as JobKeeper. From an individuals perspective, the key criteria to be eligible for this payment is that the individuals employer must satisfy the criteria set by the government in order for the individual employee to qualify. The long and short of this is that the business must be suffering and/or going to suffer a 30-50% downturn in turnover due to the Coronavirus in order for their employees to be eligible.
Eligible employees will receive a maximum payment of $1,500 per fortnight. This will be paid to them by their employer who will then receive the JobKeeper subsidy from the government.
An important side note with regards to the payment is that it is the employer who has the sole discretion to pay a higher amount (Eg. More than $1,500 per fortnight) and/or pay superannuation on top of the amounts paid. Given the government is not subsidising more than $1,500 per fortnight per employee, the employer would be paying any additional salary and/or superannuation contributions from their own reserves.
Employees will be eligible to receive payments from 30 March 2020 for a maximum of 6 months.
Full time and part time employees are eligible, including those who have been stood down. Casual employees are also eligible if they have been with their employer for at least 12 months.
In essence, the government is incentivising employers to retain their employees as this will help the economy recover quicker post this pandemic, by allowing businesses to return to normal more quickly (Eg. Not have a need to re-hire or re-train staff). The obvious benefit for employees is that the payments of $1,500 per fortnight are also noticeably higher than the JobSeeker payments, even factoring in the Coronavirus supplement on offer (total maximum payment of $1,115.70 for a single or $1,060.80 for a member of a couple).
Those Who's Turnover Has Been Severley Impacted By Coronavirus (JobKeeper)
For businesses who have been severely impacted by the Coronavirus, they will be able to access a subsidy from the government to continue paying their employees.
In order to access this, a business must not be subject to a major bank levy and must have suffered and/or going to suffer a decrease in revenue of:
· 30% for those with less than $1 billion in turnover, relative to a comparable period a year ago (of at least one month)
· 50% for those with more than $ billion in turnover, relative to a comparable period a year ago (of at least one month)
The JobKeeper subsidy is an amount of $1,500 per fortnight per eligible employee, being those who were employed on either a full or part time basis as of 1 March 2020. Long term casual employees are also eligible as long as they have been employed on a regular basis for 12 months or longer.
An important note is that the full JobKeeper subsidy must be fully passed onto eligible employees. This means that if an employees salary was previously less than $1,500 per fortnight, the employer now needs to be pay the employee a minimum of $1,500 per fortnight in order to be eligible for the $1,500 subsidy from the government.
Employers intending to claim the JobKeeper subsidy need to register with the ATO which includes confirming that they have/will suffer the required turnover decrease and also providing information on all eligible employees. They also naturally need to notify all eligible employees so that the employees are not overclaiming benefits (Eg. Claiming both the JobSeeker and JobKeeper payments as this would lead to the JobSeeker payments needing to be paid back).