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The Third Tranche

By Tyler J. Wise|June 30th, 2020|Podcast|

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The third tranche of the government stimulus package has just been announced, and this is centred around a $130 billion stimulus payment, with indications the Government are not done yet. The Government has now contributed $320 billion to the Coronavirus fight, which accounts for 16.4% of GDP. 

This latest stimulus package is built around a $1,500 per fortnight gross payment to employees, that is paid via their employer, referred to as the JobKeeper payment. The JobKeeper payment is in place for 6 months and commences the 30th of March, with first payments to eligible businesses scheduled for the first week of May which will obviously include arrears payments.

To qualify for the payment, an employer needs to notify the ATO of the eligible employees, and an eligible employee is one that was on an employers book on 01/03/2020 and is not engaged in employment by another employer or business. Eligible businesses can distribute the JobKeeper payment immediately to eligible employees and will be reimbursed from the first week of May.

As an employer you need to notify the ATO of your eligible employees, to qualify, and to assist the ATO will use Single Touch Payroll data to pre-populate the employee details for your business. It is important to note that you can include employees stood down subsequent to March 1, and those rehired.

An eligible employer will be those with annual turnover of less than $1 billion who self-assess that have a reduction in revenue of 30 per cent or more, since 1 March 2020 over a minimum one-month period, compared to the same period last year. 

All business structures are eligible for this subsidy, being companies, partnerships, trusts, sole traders and the not for profit sector is also included. 

Employers with an annual turnover of $1 billion or more would be required to demonstrate a reduction in revenue of 50 per cent or more to be eligible. Businesses subject to the Major Bank Levy will not be eligible. 

Full time and part time employees, including stood down employees, will be eligible to receive the JobKeeper Payment.  Where a casual employee has been with their employer for at least the previous 12 months they will also be eligible for the Payment however an employee will only be eligible to receive this payment from one employer. 

Eligible employees include Australian residents, New Zealand citizens in Australia who hold a subclass 444 special category visa, and migrants who are eligible for JobSeeker Payment or Youth Allowance. 

Self-employed individuals are also eligible to receive the JobKeeper Payment. Eligible businesses can apply for the payment online and are able to register their interest via ato.gov.au.

Once you have identified the eligible employees, you then need to make sure that each eligible employee receives $1,500 per fortnight, before tax. For employees that were already receiving this amount from the employer then their income will not change. For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500, before tax. And for those employees earning more than this amount, the employer is able to provide them with a top-up. 

As an employer, you are required to notify your employees they are receiving the JobKeeper payment and also must continue to report to the ATO on a monthly basis.
Stood down employees can be included, but obviously they need to be contacted to notify them that they have been nominated to receive the JobKeeper payment. 

Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via ato.gov.au. Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity. People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.

Employees cannot receive the JobKeeper and the JobSeeker payment concurrently. As an employee all you need to do is make sure you are receiving only one of the payments, and the rest is taken care of. Remember if you are receiving a JobKeeper payment your employer, even former employer will notify you that you are receiving this payment.

The JobSeeker payment partner income test has increased to $3,068 per frotnight or $79,762 per annum. If your partner’s income is below this amount then you can still receive the JobSeeker payment and the Coronavirus supplement. However, it is important to note that the personal income test for individuals on the JobSeeker payment still apply and remain unchanged.

 

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