Important dates
1 March 2020	Eligible employees had to be employed by the employer on this date (employees can be rehired if their employment ceased after this date) Employers must have carried on a business in Australia to be eligible
12 March 2020	A business must have a current ABN to be considered eligible (unless a later time is allowed by the Commissioner)
30 March 2020	The first JobKeeper payment fortnight commences
13 April 2020	The second JobKeeper payment fortnight commences
20 April 2020	Employers will be able to enrol in the JobKeeper scheme
24 April 2020	The JobKeeper Employee Nomination Notice should be completed by the employer and employee
End of April 2020	The JobKeeper payments for the first and second fortnights need to be paid (for the first two fortnights, the ATO will accept the minimum $1,500 has been paid if it is paid by the end of April)
Early-Mid May 2020	JobKeeper payment will be made to employers (if they have enrolled in the scheme)
31 May 2020	Employers need to have enrolled in the scheme for the JobKeeper payments for the first and second fortnights (we note that the Commission only recently extended the time to enrol – it was initially 30 April 2020)
27 September 2020	The JobKeeper payments end

What is the JobKeeper payment?

The Rules confirm the Government will provide eligible businesses with a flat payment of $1,500 (before tax) per fortnight for each eligible employee. The Rules also confirm the payment will be available between 30 March 2020 and 27 September 2020, 26 weeks in total.

The payment is designed to help businesses suffering reduced turnover to cover the costs of their employees’ wages, keep people in their jobs and maintain employer-employee connections so that businesses can reactivate operations quickly without having to rehire staff once the pandemic is over.

Which employers are eligible?

An employer is eligible if:

• it carried on a business in Australia on 1 March 2020 (or was a non-profit body that pursued its objectives principally in Australia);
• the GST turnover for March 2020 (compared to the GST turnover for March 2019) or the projected GST turnover of the business has reduced relative to a comparable period of the same calendar month in 2019 (starting on 1 April) or the same quarter in 2019 (starting on 1 April 2019) by more than:
  • 15 percent for ACNC registered charities (other than schools and certain universities);
  • 30 percent or businesses with an aggregated annual turnover of less than $1 billion; or
  • 50 percent for larger businesses with an aggregated annual turnover of $1 billion or more.

Example set out in the Rules: Patrick Enterprises assesses its eligibility for JobKeeper payments on 6 April 2020 based on a projected GST turnover for April 2020 of $6 million. It considers that the comparable period is the month of April 2019 for which it had a current GST turnover of $10 million. The April 2020 turnover falls short of the April 2019 turnover by $4 million, which is 40 percent of the April 2019 turnover. This exceeds the specified percentage, so the decline in turnover test is satisfied.

If an employer qualifies for the JobKeeper payments for the first fortnight because its turnover has declined by the relevant amount, ATO guidance says it will remain eligible and does not need to keep testing turnover in following months (although there will be ongoing monthly reporting requirements).

Which employers are ineligible?

Even if these conditions are satisfied, the Rules exclude a number of entities from eligibility including Australian government agencies, local governing bodies, entities that are wholly owned by an Australian government agency or local governing body, major banks, sovereign entities and entities placed into liquidation or bankruptcy.

Which employees are eligible?

The JobKeeper payment applies to full-time and part-time employees, and long-term casuals employed on 1 March 2020 (and during the relevant fortnight). Casuals will only be eligible if on 1 March 2020 they had been employed on a ‘regular and systematic basis’ for a minimum of 12 months. Casuals employed for less than 12 months will be ineligible and should be advised to apply for the alternative JobSeeker payment.

In addition, to be eligible for the payment, on 1 March 2020 all employees (including casuals):

• must be an Australian resident (within the meaning of the Social Security Act 1991) or a resident of Australia for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa
• must be aged 16 years or above.

Additionally, an employee must provide their employer with a notice in an approved form agreeing to be nominated for the JobKeeper payment. The form can be found here.

An employee will not be eligible for the relevant fortnight if they are receiving government parental leave pay or dad and partner pay or workers compensation, at any time during that fortnight.

Other eligible business participants

Under the Rules, sole traders, partners in a partnership, adult beneficiaries of a trust, and shareholders in or directors of a company (Business Participants) will also be able to apply for the JobKeeper payment. Eligibility requirements for Business Participants and entities that engage them (an Eligible Entity), operate similarly to those for employers and their employees, with some additional integrity rules. Most notably, only those businesses with a current ABN on 12 March 2020 (or such later time that the Commissioner of Taxation (Commissioner) allows) will be considered eligible, as the scheme is intended to support active businesses only.

How and when are payments made?

An eligible employer or Eligible Entity will be paid $1,500 per fortnight per eligible employee or Business Participant. These payments will be made by the Australia Taxation Office (ATO) by no later than the later of:

• 14 days after the end of the calendar month in which the fortnight ends
• 14 days after all requirements are met by the eligible employer or Eligible Entity.

This means that if an eligible employer or Eligible Entity satisfies all of the requirements, the earliest it will be paid for the fortnight commencing 30 March 2020 (and the fortnight commencing 13 April 2020) is likely to be early-mid May 2020.

As an employer, what do I need to do first?

Employers will be able to enrol in the JobKeeper scheme from 20 April 2020; for those employers who have registered for an update about the JobKeeper payments, they should receive notification from the ATO.

If an eligible employer or Eligible Entity is eligible now, the employer or Eligible Entity must notify the Commissioner by 31 May 2020 that they elect to participate in the JobKeeper scheme, in order to receive payments for the fortnights commencing on 30 March 2020 and 13 April 2020.

If the employer or Eligible Entity is not eligible now (based on the turnover test) but becomes eligible at a later date, the employer or Eligible Entity will need to notify the Commissioner by the end of the fortnight in which the entitlement arises.

Within seven days of giving an individual’s details to the Commissioner, the employer or Eligible Entity must notify the individual in writing.

You should complete the form mentioned above (the JobKeeper Employee Nomination Notice), which notifies eligible employees that the employer intends to participate in the JobKeeper scheme and ask eligible employees if they agree to be nominated by the employer as their primary employer. The form needs to be completed by the end of April. The employer does not need to lodge the form, but will need to keep a copy of it for five years.

If I am eligible, is there anything else I need to be aware of?

In order to be entitled to the JobKeeper payment, an employer must satisfy the ‘wage condition’ – this means that an employer must pay each eligible employee a total amount equal to or exceeding $1,500 for the relevant fortnight. This will then be reimbursed by the Commissioner.

Eligible employers and entities must report monthly turnover information to the Commissioner for the duration of the scheme.

Frequently asked questions

Q: What do I do if I can’t afford to pay staff until May?

A: We recommend you speak to your bank as soon as possible about your arrangements.

Q: Will employers be reimbursed for salaries paid to employees throughout April?

A: Eligible businesses can begin distributing the JobKeeper Payment immediately and will be reimbursed by the government from May 2020.

Q: Are local councils entitled to JobKeeper Payment?

A: No, local government employers are not eligible for the payment.

Q: What if I have made my employees redundant? Can the JobKeeper Payment assist me?

A: If you have already made an employee redundant, you can choose to re-employ them and stand them down as an alternative. If entitlements were already paid out, employees will likely be entitled to retain severance payments which they received on termination, though employers may seek to negotiate terms upon which they may be able to re-hire retrenched employees, taking care to always comply with applicable industrial instruments. This situation is likely to be treated in the same manner as though they have been re-employed. Specific advice should be sought in these circumstances as some entitlements may be treated as if service was continuous.

In addition, an employer will only be eligible to claim JobKeeper payments for the fortnights after it re-engaged its employee.

Q: What if an employee has more than one employer?

A: Where an employee has more than one employer, they can only receive the JobKeeper Payment from their primary employer.

Q: What if my employee has already claimed JobSeeker Payment benefits?

A: The employee needs to contact Centrelink and advise them that they will now receive JobKeeper benefits.

Maddocks has produced guides on legal issues raised by the coronavirus which may be of interest, and we encourage you to share these with colleagues who may also find them useful.