The Job keeper payment is one of the latest grants provided by the Government to support small business and encourage the continued employment of staff despite the difficult sales environment.
Value: A reimbursement (paid monthly one month in arrears) the equivalent of $750 per week per eligible person paid by the Government to a small business starting on the first week of May 2020.
The first pay period that this applies to is 30th March 2020 to 12th April 2020. The pay periods will continue until the last eligible period being 1`4th September 2020 – 27th September 2020.
Unlike the BOOST payment provided by the ATO – the Job Keeper payment will be paid directly to the business to reimburse the payment of the wages. It will not be withheld to credit against existing tax debts.
Eligibility: There are three elements to consider which I will deal with separately in additional posts:
- Is my business eligible?
- Which employees are eligible?
- I don’t have employees – what is available to me?
How do I apply?:
Registration is via the ATO business portal from the 20th of April 2020 using your MyGovID. If you do not access this area yourself normally your tax agent should be able to do do for you. Please ensure you have already collated evidence of your drop in turnover and nomination forms for your employees beforehand.
Other functional information:
My employee’s wage is more than $1,500 per fortnight.
You are expected to pay their normal wage but you will only be reimbursed $1,500 per fortnight. You must still pay the standard SGC Superannuation payments as and when they are due.
My employee’s wage is less than $1,500 per fortnight.
If you wish to be reimbursed by Job Keeper you must pay a top up amount so that their fortnightly gross is a minimum of $1,500. Superannuation on the top up amount however is voluntary for the top-up. If SGC superannuation was originally paid on the lower wage that amount is compulsory.
Nuances of Standing down Employees:
If you simply do not have the work for an employee – you are able to ‘stand them down’ and they can still be kept under the Job Keeper Grant system.
Employees who are stood down are still classified as employees for the Job seeker payment system – but you will need to pay them $1,500 a fortnight in order for the Job keeper reimbursement to occur. This is no matter if their regular wage was greater or lesser than $1,500 a fortnight.
As this standing down money paid does not relate to physical work performed – no SGC superannuation is payable on this stand down payment at all.
How does my business AFFORD to pay all these wages when reimbursement is a month later?
This is one of the important areas to be careful of when racing headlong into ‘obtaining grants’. Remember your business has to suffer a 30% drop in gross revenue for a month and you need to be able to continue funding wages. In some instances you might be facing 100% drop in sales and you still must have that money to pay wages until the reimbursement arrives.
The Government recommendation is to seek support from your bank and other normal finance lending avenues for the short term period until the Job Seeker support kicks in. Remember the money MUST be paid to the staff – you cannot ‘owe them’ and pay later on.
It is important to note that a number of businesses who would be applying for the Job Seeker financial support would also find themselves eligible for the BOOST based on the March 2020 BAS lodgement. This is worth a minimum of $10,000 and may well go a long way (if not used up on existing tax debt) to helping with the gap in money.