The passing of JobKeeper related legislation through the Australian Parliament brings some relief for countless employees affected by the COVID19 pandemic, but also some difficult choices for Australian employers.
There are pros and cons to starting JobKeeper payments, due to lingering uncertainty around eligibility and whether businesses are able to wear the initial investment through April.
We have been watching JobKeeper closely since its announcement, however
all advice from Sybiz should only be considered general in nature. We recommend consulting your trusted advisors to discuss your unique circumstances.
Now that JobKeeper has passed through Parliament, your next steps will depend on an initial self-assessment of your eligibility. Some businesses will be certain they are meeting the criteria, while others may be unsure. Some will be able to wear the initial investment of JobKeeper until the first week of May when reimbursements begin, others may not.
Depending on your business’s circumstances, there are some important decisions to make. See below for those that apply to you. You can also find out more about JobKeeper and how Sybiz Visipay can help you manage payments on our FAQs page.
I am definitely eligible for JobKeeper
For businesses who are certain they are eligible for JobKeeper assistance, determining which employees are able to receive payments should be the first step. Sybiz has developed a custom report to assist with this process.
This will allow business owners to understand the initial financial impact of JobKeeper until reimbursements are available from May 2020. Early engagement with employees will also be important in cases where you may not be their main employer.
The primary decision for businesses at this stage will be how they can afford the $1,500 per employee per fortnight until they receive reimbursement, particularly in instances where employees typically earn considerably less.
Remember that if you delay making JobKeeper payments to employees, they cannot be back paid for the period starting 30 March 2020.
Here are some decisions you may need to consider:
- How many of my employees are eligible?
- Can I afford to start paying JobKeeper to my employees now?
- Will I choose to pay superannuation on top of JobKeeper payments?
I am probably eligible for JobKeeper
If you feel at this stage your business is probably eligible, either because your turnover has dipped significantly or is expected to, determine which employees are eligible to receive payments in order to understand the initial financial impact of JobKeeper.
This will be an important decision about whether your business can afford to bank roll payments until reimbursements begin in the first week of May 2020. You should also be prepared for any potential delay in receiving reimbursement.
The Australian Government has indicated there will be a somewhat flexible process for considering eligibility and some ‘good faith’ clauses, however if your business does not end up meeting the criteria there is the risk that you will be out of pocket for payments made in April or will have to pay back any future JobKeeper subsidies and possibly face penalties including general interest charges.
It is also important to keep in mind that if a business delays the start of JobKeeper payments, employees cannot be back paid for the period starting 30 March 2020.
Here are some decisions you may need to consider:
- How likely is my business to meet the turnover threshold for JobKeeper?
- Can I afford to start paying JobKeeper to my employees now?
- What are the additional costs, such as administration time and superannuation?
- What are the implications for employees/my business if I delay?
- What are the penalties I face if I participate but am ultimately found to be ineligible?
I am unsure if I am eligible for JobKeeper
Businesses who remain unsure about their eligibility will have the most to consider before committing to JobKeeper payments and each will need to consider their own circumstances carefully.
Of course, determining which employees are eligible to receive payments, in order to understand what the cost of JobKeeper would be to your business, will be an important first consideration. As will determining the likelihood of your turnover meeting the threshold for JobKeeper eligibility.
The Australian Government has indicated there will be a somewhat flexible process for considering eligibility and some ‘good faith’ clauses, however if your business does not end up meeting the criteria there is the risk that you will be out of pocket for payments made in April or will have to pay back any future JobKeeper subsidies.
It is also important to keep in mind that if a business delays the start of JobKeeper payments, employees cannot be back paid for the period starting 30 March 2020.
Here are some decisions you may need to consider:
- How likely is my business to meet the turnover threshold for JobKeeper?
- Can I afford to make JobKeeper payments now?
- What are the additional costs, such as administration time and superannuation?
- What is the impact on my business if I am found to be ineligible?
I am definitely ineligible
If you are certain that you will be ineligible to receive JobKeeper assistance, it is important to alert your employees as soon as possible, especially if you have employees who have been stood down or recently let go. This will assist employees in deciding whether to continue applying for JobSeeker or engaging with another employer for JobKeeper payments.
Sybiz will continue to provide resources and information about JobKeeper as this important initiative progresses. If you are not already, we recommend
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