JobKeeper clarification: Need to pay $3000 to all eligible workers by end of April
23 April 2020
MEA wishes to clarify and stress the Australian Taxation Office (ATO) guidelines that employers need to pay each eligible employee $3000 by the end of April to meet the JobKeeper scheme eligibility. The ATO has also clarified that employers need to apply a ‘one in, all in’ approach for the scheme.
Each request lodged by an employer will include a declaration that the ‘wage condition’ has been met and continues to be met.
Specifically, the ATO states in some of its guidance:
What you can’t do
You cannot claim the JobKeeper payment on behalf of employees who were not paid at least $1,500 (before tax) during each JobKeeper payment period.
You cannot claim the JobKeeper payment in advance. The JobKeeper payment is a reimbursement from us to an employer in arrears, and cannot be paid in advance in any circumstances.
The ATO will accept a payment made by the end of April covering those two periods will count.
Otherwise, a member risks being held ineligible for the subsidy altogether.
For example, a third-year apprentice who is paid $666.88 per week, plus $21.3 for the week in travel time allowances, will need to have their wage topped up to the $750 per week.
Allowances should also be included in the declaration of wages.
Further, in relation to other types of workers:
Employees who were stood down or on long term leave
Employees who have been stood down from work under the Fair Work Act 2009 without pay may still be eligible employees as long as they were in your employment and met the eligibility criteria on 1 March 2020.
You will need to have paid them at least the minimum amount of $1,500 for each fortnight you claim for, to receive the JobKeeper payment.
Employees who have been terminated
If you terminated an employee after 1 March 2020, you can re-engage them and they will be eligible if they met the eligibility criteria on 1 March 2020.
If you want to claim the JobKeeper payment for employees you have re-engaged, you will need to:
- confirm they want to be re-hired and participate in the JobKeeper Payment scheme with you
- re-engage the employees you want to claim for
- ask them to complete the JobKeeper employee nomination notice (or your own employee nomination notice) and return it to you. You are required to keep this form as part of your record keeping obligations under the law
- start paying them a minimum of $1,500 (before tax) for each fortnight they are employed and you claim for.
You will only be paid a JobKeeper payment for employees from the fortnight they were re-engaged. You cannot claim retrospectively for employees you re-engage.
It is a hard line that the ATO are following and many members have expressed that they will likely have cashflow difficulties in meeting this requirement. As such, we highly recommend applying for the stimulus loans, which have a quick turnaround time frame.
Learn more about the Coronavirus SME Guarantee Scheme
In summary, a member needs to pay all eligible workers the $1,500 per fortnight for the month of April in order to be reimbursed and qualify for the scheme.