JobKeeper a Lifeline for Local Businesses

By Janie Jordan

LOCAL businesses have welcomed the Federal Government’s JobKeeper payment plan, announced on March 30, with many relieved that they can keep their staff and keep their doors open.

Steve Guihot, Scone Chamber of Commerce President, said that it was “a great initiative” that he hoped would help the many, small, family-owned business in the community.

Local financial adviser, Jane Ryan from Fox Wealth Advisory shared the sentiment saying that the JobKeeper plan is a welcome relief for both employers and employees.

“There would be scores of local businesses hurting right now, not just those in retail or hospitality,” said Jane Ryan.

“The upshot is that they will be able to retain their staff whilst the recovery plan keeps the wheels of our local economy going,” she said.

“There will be there will be scores of locals who will meet the criteria,” Jane Ryan.

Annie Baker, who founded Asser House Café five years ago, and employs up to eight casuals applauded the package.

“It’s great,” said Annie.

“And will keep businesses operating,” she said.

For Annie, it is a “huge relief, a lifeline” as she can keep her staff and keep providing meals for the community’s essential workers.    

On Monday, the Federal Government announced the JobKeeper plan as part of its third stimulus package.

The plan includes an expected wage subsidy of $1,500 per employee, per fortnight to keep Australians in work.

JobKeeper applies to full-time, part-time and casual workers, as well as sole traders, charities and not for profits.

The JobKeeper payment plan will start in May but will be back-dated to 30 March this year.

The new scheme forms part of the government’s third economic assistance package which now totals $130 billion.

According to Business Australia, over 200,000 businesses have registered for the JobKeeper payment plan, so far.

While unable to register right now, thanks to a good start to the year, Airspeed Aviation chief pilot and director, Ben Wyndham, says that the package will be “good for some people.”

“It’s welcome, and while not perfect, is a useful initiative,” he said.

 “We’re in a far better position than we were a week ago,” Ben Wyndham said.

While Airspeed Aviation has seen no drop-off to date, Ben anticipates the next two months could be “abysmal” when the next wave of restrictions hit.

Here is what the JobKeeper plan means for both employers and employees.

Eligible employers:

• With a turnover of less than $1bn that have lost 30% or more of their revenue compared to a comparable period a year ago.
• With a turnover of $1bn or more and with at least a 50% reduction in revenue compared to a comparable period a year ago.

Eligible employees:

• Were employed by an eligible employer at 1 March 2020.
• Can be sole traders, full-time, part-time, or long-term casuals employed on a regular basis for longer than 12 months as at 1 March 2020.
• Are at least 16 years of age.
• Are an Australian citizen, the holder of a permanent visa, a protected special category visa, a non-protected special category visa who has been residing continually in Australia for 10 years or more, or a New Zealander on a special category (subclass 444) Visa.

There is good news too if you’re an employer, who is on the books and drawing an income from their business, they too can qualify for the payment, according to Jane.

Both Jane and Annie agreed, that the delay in receiving the payment from the government could be a challenge.

“With drastically reducing cash flow, this will be the test for business to stay afloat,” says Jane.

“And with so many local businesses employing family members it will be a drain,”she said.

While the subsidy started on 30 March, first payments start to be received by employers in the first week of May.

“This translates to a minimum four week delay in reimbursement from the government.  In the meantime, employers must continue paying their employees and then claim the money from the first week of May,” said Jane.

If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.

“It is also important that employers must continue to pay the superannuation guarantee on regular wages but it is up to employer whether they pay superannuation on additional JobKeeper payments,” said Jane.

“In essence, if the JobKeeper payment is higher than the employee’s normal wage, they are only required to pay the SGC contribution on what they would have normally been paid,” she said.

“The upshot for our local workers means that employees of businesses that shut down or have very limited trading due to various restrictions – in particular our local cafes and restaurants, their staff will continue to be paid even if they are not working,” she said.

“If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will also receive, at a minimum, $1,500 per fortnight, before tax,” Jane said.

The payment will be administrated through the Australian Tax Office.

Businesses are advised to register their interest in JobKeeper updates on the ATO website.

Annie says that the new plan will be easy to implement, thanks to the “simplified tax system.”

“All you have to do is create a new category when you do the payroll, or enter a new number into your accounting system,” says Annie.

“It’s a lump-sum. It’s easy,” she said.

“Tax has to be taken out, so it works out to be the equivalent of a Centrelink payment. “It gets Centrelink off the hook and will free up the system,” according to Annie.

What’s critical in the JobKeeper program is that it is for employers like Annie, who then passes the money on to employees.

The employer will deal with the Government, fill in the paperwork and receive the wage subsidies.

Employees who are kept on the books, even if the business goes into hibernation for a while, will keep receiving their pay in their bank accounts.

There’s lots of information out there, and we’ll keep updating, but best to check out the official sites.

Here’s a link to the Treasury that employees might want to check out, from the Federal Government.