How Does JobKeeper Help the Australian Workforce?
By now, every worker in Australia will have heard of JobKeeper, but many are still wondering what it is, whether they are eligible, and how to access it. Essentially, it is a way that employers can preserve their business most valuable asset – their employees without overreaching their financial capabilities, and be able to ride out the storm that is COVID-19. The government’s mammoth job-saving scheme is an attempt to put the economy into hibernation. It sleeps while the country battles the COVID-19 health crisis and, when the fight is eventually over, companies and their staff can, in theory, spring back into action.
“This is similar to the scheme announced in the UK, and is supposed to keep the lines of communication between employers and employees open, allowing for a relatively rapid restoration of activity if and when normal service resumes. This takes some pressure off the welfare system,” explained Dr Andrew Grant from the University of Sydney‘s Discipline of Finance.
At A$130 billion, this package alone is worth 12% of the economy over the next six months. Along with the measures already announced, it takes Australia’s fiscal support to a similar scale as recently legislated in the United States.
How It Works
Under the JobKeeper payment, businesses impacted by the Coronavirus are able to access a subsidy from the government to continue paying their employees. Affected employers can claim a fortnightly payment of $1,500 (before tax) per fortnight per eligible employee, or for one eligible business participant from 30 March 2020, for a maximum period of 6 months.
Employers are required to pay eligible employees a minimum of $1,500 (before tax) per fortnight to claim the JobKeeper payment. This will be paid to the employer in arrears each month by the Australian Tax Office. JobKeeper payments can be made for the period beginning 30 March 2020.
In order to be eligible for the JobKeeper payment, employers and their employees must meet a range of criteria.
Are You Eligible for JobKeeper?
As an employee, in order to be eligible for the JobKeeper payment, you:
- Were employed by an eligible employer at 1 March 2020
- Can be sole traders, full-time, part-time, or long-term casuals 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, a non-protected special category visa who has been residing continually in Australia for ten years or more, or a New Zealander on a special category (subclass 444) visa.
The government estimates that six million workers will receive this payment. Gig economy workers will be covered, as they are sole traders.
Frequently Asked Questions
Will I receive $1,500 even if I ordinarily earn less?
Yes. If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay them, at a minimum, $1,500 per fortnight, before tax. It is, therefore, possible for a long-term casual or part-time worker to receive more than their ordinary pay.
What if I was stood down or sacked?
If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
This means that employees of businesses that shut down due to various restrictions – such as cafes, restaurants, theatres, casino workers and the like – will continue to be paid even if they are not working.
If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will also receive, at a minimum, $1,500 per fortnight, before tax.
When will it start being paid?
Businesses were able to register their interest in participating in the payment from 30 March on the ATO website.
What about superannuation?
Employers must continue to pay the superannuation guarantee on regular wages; however, it is up to the employer whether they pay superannuation on additional job keeper payments.
For example, a worker who ordinarily receives $1,000 a fortnight plus superannuation will receive the $1,500 JobKeeper payment, with superannuation paid on the first $1,000 and the employer able to decide whether to pay it on the last $500.
Can I get the JobKeeper and other payments?
On 30 March, Scott Morrison said a person receiving the JobKeeper payment cannot also receive the JobSeeker payment (formerly Newstart). People who have already applied for JobSeeker can withdraw and shift to JobKeeper payments if they are re-engaged by their employer.
A person cannot be in receipt of JobKeeper payments from two or more employers.
What about eligibility for JobSeeker payments?
Eligibility has been expanded. At the moment, Australians out of work are not eligible for the JobSeeker payment if their partner earns $48,000 or more.