JobKeeper Legislation passes through Parliament

On 8 April 2020, the Government passed various Bills through Parliament to give effect to, amongst other things, the JobKeeper scheme. 

Importantly, the specific details about eligibility criteria and the administration of the scheme are contained in a legislative instrument referred to as the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020.  This instrument has yet to be released in final form (but an exposure draft appeared briefly on the Treasury website yesterday before being withdrawn).

The scheme starts on 30 March 2020 and ends on 27 September 2020 (a total  period of 13 fortnights) and will be administered by the Australian Taxation Office.
Eligibility:

The key conditions for participating in the scheme on a relevant fortnight are as follows: The first JobKeeper fortnight starts on 30 March 2020 (and ends on 12 April 2020) and subsequent JobKeeper fortnights run through to the fortnight ending 27 September 2020. 

• The individual is an “eligible employee” for the relevant fortnight.

To be an eligible employee, the individual must be:

• an employee or long-term casual employee of the entity at 1 March 2020;
• at least 16 years old at 1 March 2020;
• employed by the entity at any time during the fortnight; and
• be an Australian citizen, permanent resident or holder of a subclass 444 special category visa.

Further, to be an eligible employee, the individual must provide a notice (in the approved form) that they satisfy the above requirements and agree to be nominated by the entity as an eligible employee.  Employees on parental leave, those who receive “dad and partner pay” and those who are fully incapacitated and receive Australian workers’ compensation are not eligible.

• The employer pays the eligible employee at least $1,500 in the relevant fortnight in the way of salary, wages, commissions, bonuses, allowances, etc., as well as amounts paid to superannuation (including by way of salary sacrifice).

• The employer has notified the ATO (in the approved form) that they elect to participate in the scheme for that fortnight.

For the 1^st and 2^nd JobKeeper fortnights, this must be done by the end of the 2^nd JobKeeper fortnight (26 April 2020). For subsequent JobKeeper fortnights, it will be at the end of each relevant fortnight. As a result, it will be necessary to move quickly to establish eligibility and make necessary payments to eligible employees before 26 April.

• In relation to each JobKeeper fortnight for which notification is provided to the ATO, the employer provides all relevant entitlement information, including details of the individuals entitled.

• The employer must notify each eligible employee in writing within 7 days of providing the above notification to the ATO. 

Eligibility in respect of “business participants” who are not employees:

The JobKeeper scheme is also available to business entities (and sole traders) in respect of one “business participant” who is not an employee of the business.  This entitlement is in addition to any eligible employees (if applicable). This extension is designed to support business owners who operate as a sole trader, a partnership, a company or a trust and who take their remuneration from the business by way of profit share, dividend or trust distribution.  The additional conditions that need to be met are as follows:

• The entity is not a non-profit body (non-profit bodies would generally not be able to make quasi-profit distributions to controlling individuals in any event).

The nominated individual is an “eligible business participant” for the relevant fortnight. To meet this requirement, the individual must be:

• actively engaged in the business of the entity (but not as an employee);
• either a sole trader, a partner in a partnership, an adult beneficiary of a trust or a shareholder/director of a company;
• at least 16 years old at 1 March 2020;
• an Australian citizen, permanent resident or holder of a subclass 444 special category visa at 1 March 2020.

The individual must provide a notice (in the approved form) that they satisfy the above requirements and agree to be nominated by the entity as an eligible business participant.