Businesses finally have clarity for the JobKeeper payment scheme, with the Federal Government prescribing new rules for the $1,500 JobKeeper payment. The Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Rules) helpfully detail eligibility requirements and conditions of the scheme.
The scheme took effect on 9 April 2020 under the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Act). The JobKeeper payment will be available for a period of 26 weeks for the fortnight beginning 30 March 2020 up to the fortnight ending on 27 September 2020.
Eligible businesses will receive a fixed payment of $1,500 per fortnight per eligible individual as long as the business has satisfied the wage condition of having already made payments to the eligible person equal to or greater than the amount of the JobKeeper payment (less PAYG withholding and salary packaging) during the relevant fortnight.
To be eligible, a business must be able to demonstrate:
- on 1 March 2020, it was a business in Australia that was not a bank subject to the Major Bank Levy Act, an Australian or State government agency, a local governing body, or a government wholly-owned subsidiary;
- at any time a liquidator or a trustee in bankruptcy has not been appointed; and
- before the end of any JobKeeper fortnight, it met the decline in turnover test (either 15%, 30% or 50% depending upon the type and size of the business).
The Rules identify two ways in which a business can satisfy the decline in turnover test. For the basic test, the business compares their projected GST turnover for the relevant month of the scheme e.g. April 2020 against the GST turnover of the business for the relevant comparison period e.g April 2019. Alternatively, the Commissioner for Taxation may determine a different test where no relevant comparison period exists.
To be eligible, an individual as of 1 March 2020 must be:
- an Australian resident (or New Zealander with a special category visa), and be over 16 years of age; and
- for an individual who is an employee, full-time or part-time employee or a casual who has been employed on a regular and systematic basis for 12 months or more; or
- for an individual who is an 'eligible business participant', they have a particular role within a business that is a sole trader, partnership, trust (adult beneficiary) or a director/shareholder of a company.
An employee is not eligible for the JobKeeper payment if, during the relevant fortnight, the person was:
- paid parental leave pay under the Paid Parental Leave Act 2010;
- paid day and partner pay; or
- totally incapacitated for work receiving payments under workers' compensation legislation.
Importantly, the Scheme operates on the basis that an individual must have elected in writing to receive the JobKeeper payment, and nominated the business to receive the payment. You can access the prescribed JobKeeper Employee Nomination Notice here. The business must also have notified the Commissioner of Taxation that the entity wishes to participate in the Scheme in relation to the eligible individual at or before the end of the relevant fortnight.
On a monthly basis, a business participating in the scheme must notify the Commissioner of their current GST turnover for the reporting month and their projected GST turnover for the following month.
Under the Scheme, employers may now give three types of directions to eligible employees under the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020, which amends the Fair Work Act 2009 (Cth):
- stand down direction not to work on a day or days, or reduced number of hours, than the employee would normally work;
- direction to perform any duties that are within the employee's skill and competency; and
- direction to perform duties at an alternate location.
To be effective, the employer must first consult with the employee about the proposed direction, and give at least three days' notice before the direction takes effect. The direction must be reasonable and safe, and in relation to stand down direction only, the employee cannot be usefully employed for the period of the stand down.
Alternatively, an employer can seek agreement of an employee to either change their days or times of work, or require the employee to take annual leave at half pay (as long as the employee's resulting balance is not fewer than two weeks). An employee cannot unreasonably refuse this variation to their employment.
Any JobKeeper directions issued, or agreements reached, will remain in place until either revoked by the employer, replaced by a new JobKeeper direction, or 28 September 2020, whichever occurs first.
Although the Federal Government has now prescribed the Rules, much complexity with the scheme remains. Businesses should seek advice, specifically before issuing any directions to employees, to ensure they are acting lawfully.
Thanks to Bianca Banchetti for her assistance in putting this article together.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.