Breaking down the $130-billion coronavirus wage-subsidy stimulus package – what it is and how it applies to you
The Federal Government has today, Monday March 30, announced an unprecedented $130-billion stimulus package in response to the coronavirus crisis, the third and largest package so far. The package targets businesses who have been forced or were due to stand down staff due to the pandemic, in a bid to prevent millions of Australians losing their jobs. The ‘JobKeeper payment’ will see businesses receiving a fortnightly wage subsidy of $1500 per employee.
In the press conference, Prime Minister Scott Morrison announced that he expected six million Australians would access the payment for the next six months. There was a lot of information to take in, so we’ve tried to break down all of your questions:
Tell me the figures?
The package, in total, is worth $130 billion and is expected to cover the next six months, and be accessed by six million Australians. Businesses will be paid a flat $1500 a fortnight for each employee as part of a ‘JobKeeper allowance’. The wage subsidy represents 70 percent of the median wage and 100 percent of the average wage of those working in industries hit hardest by the coronavirus crisis, such as hospitality, tourism and retail.
Who is eligible?
Workers who are currently employed (including those stood down) will be eligible for the payments, provided they were on the businesses’ books from March 1. This applies to full-time, part-time and long-term casual (longer than 12 months) employees, as well as sole traders. Basically, if you have been stood down and can perform a wage function, then you should be eligible for this payment.
If you were employed on March 1, then your employment was terminated, but then you were re-hired by the same eligible employer, you will also receive the payment.
As far as businesses go, the turnover of the business will need to have fallen by 30 percent or more to be eligible, or by 50 percent or more in the case of a business with an annual turnover of more than $1 billion. The business also cannot be subject to the Major Bank Levy. Not-for-profit entities, charities and self-employed individuals (without employees) that meet the above turnover tests are all eligible to apply.
What if I earn more/less that $1500 a fortnight?
Based on it being a flat payment, if you earn less than $1500 a fortnight ordinarily (before tax), you will still get $1500 per fortnight (before tax). Some bonus cash for you. If you earn $1500 or more normally (before tax), then the JobKeeper payment will subsidise part or all of your income.
What about my entitlements/annual leave?
If you’ve already had your entitlements paid out, you will need to work that out with your employer. If not, you can hold on to all of your leave entitlements (and continue to accrue them).
What if I am on a temporary visa?
Unfortunately, you aren’t eligible at this stage, but more conversations are in the works regarding this. Permanent residents and New Zealand 444 visa holders, however, are eligible.
When will it come into effect?
The payments will be administered via the Australian Taxation Office and will roll out from the first week of May, backdated to March 30. Employers are encouraged to keep paying employees, with the understanding that they will be reimbursed backdated to March 30.
Will I get paid superannuation on this payment?
No, you will not.
So, do I still need to deal with Centrelink?
Not if you are/were still on your employer’s books from March 1, and (for casuals) have been employed for more than 12 months by that business. The subsidy aims to ease the current overload on the Centrelink network.
What if I do still need Centrelink?
The burden should be significantly lifted by this wage subsidy, so accessing JobSeeker payments should hopefully become easier. Further to that, the Prime Minister also announced changes to the income test for people on the JobSeeker payment (previously Newstart, which has been doubled to $1100 a fortnight) – your partner can now earn $79,762 a year before you are ineligible for the payment. Previously it was capped at $48,000.
This situation is continuously evolving and we promise to keep you updated on the information as we hear it. Before acting on anything, always be sure to consult the official Government resources and updates. You can read the official Government overview here, fact sheet for employees here and employers fact sheet here, or register for JobKeeper updates here.