As part of the economic response to the coronavirus, the Australian government has announced a 130$ billion Jobkeeper payment plan. Like its name suggests, the Jobkeeper payment scheme was created to keep businesses in operation and employees paid during the ongoing coronavirus crisis.
The Treasury Department estimates that roughly 6 million workers will be able to receive a fortnightly payment of 1,500$ (before tax) payment through their employer for up to 6 months. That’s a considerable amount of the workforce, considering the latest census recorded roughly 11 million people being employed either full-time or part-time in Australia in 2016. The government estimates that fortnightly payments of 1,500$ (before tax) account for nearly 70% of the median wage of Australian workers. They therefore hope the payments will be enough to keep both workers and their employers financially stable during this period of economic uncertainty.
How will small-to-medium businesses benefit?
The JobKeeper payment scheme is directed at keeping small-to-medium businesses afloat during the coronavirus outbreak. It is part of the government’s provisions for temporary relief for financially distressed businesses and their employees. Both small-to-medium business owners and their employees can apply for this scheme as well as sole traders, as long as all parties meet the requirements laid out by the Treasury Department. The Treasury Department estimates that this measure will cost $130 billion across 2019-20 and into 2020-21.
“Under the JobKeeper Payment, businesses and not-for-profits significantly impacted by the Coronavirus outbreak will be able to access a wage subsidy from the Government to continue paying their employees. This assistance will help businesses to keep people in their jobs and re- re-start when the crisis is over. For employees, this means they can keep their job and earn an income”, according to the Fact Sheet released by the Australian government.
Which small-to-medium businesses qualify for Jobkeeper payments?
So which employers of small-to-medium businesses are eligible for the Jobkeeper payment scheme? According to the Australian government: Employers Employers (including not-for-profits) will be eligible for the subsidy if:
- Their business has an annual turnover of less than $1 billion and they estimate their turnover has or will likely fall by 30 per cent or more; or
- Their business has an annual turnover of $1 billion or more (or is part of a consolidated group for income tax purposes with a turnover of $1 billion or more) and they estimate their turnover has or will likely fall by 50 per cent or more; and
- Their business is not subject to the Major Bank Levy.