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What is JobKeeper and who qualifies for it?

JobKeeper Webcast: your questions answered.
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What is JobKeeper and who qualifies for it?

What is JobKeeper and who qualifies for it?

4 May 2020

We received so many questions from our recent webcast on “As an employer, are you up to date with your obligations? JobKeeper and Fair Work Act amendments” held on 21 April with Luis Izzo from Australian Business Lawyers & Advisors.

We’ve answered the questions below for you. If you have a follow up question, we would love to help. Please don’t hesitate to get in touch with us.

Call us on 1300 575 394

Question: Do you pay tax on the JobKeeper payment?

Answer: You must pay a minimum of $1,500 per fortnight to your eligible employees, withholding income tax as appropriate. The $1,500 per fortnight per employee is a before tax amount.

Question: Which employees qualify for the JobKeeper payment?

Answer: You are an eligible employee if you:
  • are currently employed by the eligible employer (including if you were stood down or re-hired)
  • were for the eligible employer (or another entity in their wholly owned group), either a  
    • permanent full-time or part-time employee at 1 March 2020
    • long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020 and not a permanent employee of any other employer  
  • on 1 March 2020 were 18 years of age or older (if they were 16 or 17 they can also qualify for fortnights before 11 May 2020, and continue to qualify after that if they are independent or not undertaking full time study)
  • were an Australian resident as at 1 March 2020 within the meaning of the Social Security Act 1991, which requires that they reside in Australia, and are one of an Australian citizen, the holder of a permanent visa, or a Protected Special Category Visa Holder. More information about these requirements can be found from the Services Australia website under residence descriptions. Your employee can also be an Australian tax resident who is a Special Category (Subclass 444) Visa Holder. Employees who are not permanent residents of Australia must notify you of their visa status to allow you to determine if they are eligible.
  • were not in receipt of any of these payments during the JobKeeper fortnight
    • government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010
    • a payment in accordance with Australian worker compensation law for an individual's total incapacity for work.

You cannot claim for any employees who either:
  • were first employed by you after 1 March 2020
  • left your employment before 1 March 2020 have been, or
  • have agreed to be, nominated by another employer.

[edited to add]
For all 16 and 17 yr olds (casuals, FT and PT) new rules on eligibility will apply from 11 May 2020 so that to continue on JobKeeper they must either be independent or not undertaking full-time study. Because it’s an either/or criteria if a junior is NOT in full time study they will still qualify for JobKeeper. It’s only necessary to consider the meaning of ‘independent’ for those who are undertaking full time study, to determine if they are still eligible on the criteria of being independent. The terms independent and undertaking full-time study are taken from the Social Security Act 1991 (Cth). Typically to qualify as ‘Independent’ one of the following would describe the junior:
  • have supported themselves through work with long term full or part-time employment broadly for a two year period;
  • are, or have been, married or are in a registered relationship;
  • have lived in a de facto relationship as a member of a couple for at least 12 months;
  • have, or have had, a dependent child;
  • are a job seeker assessed as unable to work over 30 hours a week;
  • are unable to live at home due to extreme circumstances;
  • have parents that are unable to support them;
  • are a refugee and their parents do not live in Australia;
  • are an orphan that has not been legally adopted; or
  • are in state care, including foster care.

Question: What happens if the business overall fails the turnover test, but certain business areas of the business show the required % decline in turnover test? Does this mean the business is still unable to access the JobKeeper subsidy?

Answer: It looks like this business will not qualify. To quality, your business must have:
  • 30% fall in turnover (for an aggregated turnover of $1 billion or less)
  • 50% fall in turnover (for an aggregated turnover of more than $1 billion), or
  • 15% fall in turnover (for ACNC-registered charities other than universities and schools)

Question: How does the payment apply to sole traders?

Answer: Sole traders and some other entities (such as partnerships, trusts or companies) may be entitled to the JobKeeper Payment scheme under the business participation entitlement. However, not-for-profit organisations are not included under the business participation entitlement.

Your entity may be eligible for the JobKeeper Payment scheme if you:
  • have a non-employee individual who is actively engaged in the operation of the business – we refer to this individual as the eligible business participant
  • meet the other relevant eligibility requirements.

Question: My employee doesn’t wish to be nominated for JobKeeper. Do they have to opt in? If they don’t would I still be able to receive JobKeeper for the employees?

Answer: It is not compulsory for an employee to nominate you as the employer for JobKeeper. If they don’t nominate you, they cannot receive the JobKeeper payment from you. If they usually earn less than $1,500 a fortnight, this means that you would not have to increase their pay to at least $1,500 per fortnight (before tax), unlike for other employees who do nominate.

Question: I have a staff member who has gone on parental leave, will they be eligible for JobKeeper?

Answer: The employee will not be eligible for the JobKeeper Payment if they are receiving Parental Leave Pay from Services Australia. However, the employee may be eligible if they are on parental leave from the eligible employer. They will be eligible if they are on unpaid parental leave.

Question: Do employees still receive accrue leave entitlements if they are on LWOP and have been stood down?

Answer: Yes

Question: If I think I will be 30% down in May but not in April. Can I claim in April anyway or do I wait till May?

Answer: The turnover calculation is based on your sales (excluding GST). You need to compare your sales (or likely sales) for a recent month with the same month last year (for example compare April 2019 and April 2020 sales). You can also use the April to June 2020 quarter to compare the same quarter last year.

Question: Do I have to pay superannuation on the JobKeeper payment?

Answer: Employers must continue to pay the superannuation guarantee on regular wages and paid leave, but it is up to employer whether they pay superannuation on additional JobKeeper payments.

For example, a worker who ordinarily receives $1,000 a fortnight plus superannuation will receive the $1,500 JobKeeper payment, with superannuation paid on the first $1,000 and the employer able to decide whether to pay it on the last $500.

Question: When will JobKeeper start being paid?

Answer: The subsidy will be backdated to start on 30 March, with the first payments to be received by employers in the first week of May.

In the meantime, employers must pay their employees $1,500 fortnightly and then claim the money from the first week of May.

JobKeeper operates with a one-in all-in principle, meaning that once an employer decides to participate it must pay JobKeeper to all eligible employees who complete nomination forms.

Question: What happens to employees who are on Workers Compensation. Will they be able to access the JobKeeper payment?

Answer: If an employee is receiving workers compensation, they will be eligible for the JobKeeper Payment if they are actually working.  For example, on reduced hours, but will generally not be eligible if they are not working.

Question: What if my employee is paid more than $1,500 per fortnight before tax?

Answer: If the eligible employee is paid more than $1,500 a fortnight before tax, the employer will only be reimbursed $1,500 per fortnight.

Question: Will the ATO use the JobKeeper payments to offset a BAS debt?

Answer: The payment will generally be paid directly to the employer and not used to offset tax liabilities, as the intent is that it is a payment that facilitates employers to pay their employees.

Have more questions about JobKeeper and your obligations? We’d love to help. Give us a call on 1300 575 394 to see how we can make people management easier.

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