Supporting business through the current health emergency
We understand that many Australians may be facing tough times in the coming months, as we feel the financial impacts of the coronavirus (COVID-19) health emergency. Many businesses are wondering how the stimulus package announcements will apply to them and how superannuation payments will work.
Understanding JobKeeper Payments
The Federal Government announced an economic stimulus package, called JobKeeper, designed to help an estimated 6.7 million Australians who’ve lost income due to coronavirus.
Your business is eligible to apply for the JobKeeper payment if:
- Your business has a turnover of less than $1 billion, and your turnover has fallen by more than 30 per cent; or
- Your business has a turnover of $1 billion or more, and your turnover has fallen by more than 50 per cent.
The turnover fall is based on the same period a year ago.
For an individual to receive the JobKeeper wage subsidy, their employer must register their interest. Over 370,000 businesses have already registered for the scheme.
The JobKeeper payment will provide a wage subsidy to eligible businesses to continue paying their employees. Affected employers can claim a fortnightly amount of $1,500 per eligible employee from 30 March 2020, for a maximum of six months.
Employees can be full-time, part-time, sole traders or long-term casual staff.
If you are working in the gig economy as a sole trader, you will be able to apply for JobKeeper.
To register your interest as an employer, visit ato.gov.au/job-keeper-payment.
The JobKeeper package requires legislation, and this has not yet passed.
Superannuation and JobKeeper Payments
Super Guarantee must continue to be paid by employers on regular wages, even if those payments are via the JobKeeper program. However, if an employee receives additional JobKeeper payments, increasing their usual salary, it is up to the employer whether they pay super on the extra income.
For example, a permanent part-time employee earning $1,000 plus super will receive the $1,500 JobKeeper payment. Employers must pay superannuation on the first $1,000 but can choose whether to pay it on the remaining $500.
We encourage you to find out more information about the JobKeeper package and to register your interest at ato.gov.au/job-keeper-payment.
Boosting business cash flow
If your business has a turnover of under $50 million, you will be eligible to receive a cash flow boost from the Federal Government. The tax-free boost will be between $20,000 and $100,000, delivered over two payment cycles.
The ATO explains that “eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100 per cent of the amount withheld, up to a maximum payment of $50,000.”
The first payment will be delivered by the ATO as a credit to your business from 28 April 2020. When you receive your cash flow boost will depend on your business activity statement (BAS) lodgement schedule.
Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020. Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements.
The minimum payment will be applied to your first lodgement.
There’ll be an additional payment for the July–October 2020 period. This will be equal to half of your total initial amount (up to a total of $50,000).
If you are an eligible business and pay salary and wages, you will receive a minimum payment of $10,000. This payment will occur even if you are not required to withhold tax.
There are no new forms to fill out. The ATO automatically calculates this tax-free payment.
To find out more, visit treasury.gov.au/coronavirus/businesses.
Accessing super through temporary compassionate grounds
The Federal Government has announced new temporary compassionate grounds for early release of super, available from mid-April 2020.
We understand that for some members, it will be necessary to access their super to reduce the impact of the financial strain caused by the ongoing health emergency. We strongly encourage members to apply for available Government assistance before applying to access their super. That should be a last resort given the potential negative impact it can have on retirement savings.
We have more information about accessing super through temporary compassionate grounds at mediasuper.com.au/blog
If you or your staff wish to know more about the temporary compassionate grounds measure and how to apply, visit the Treasury website at treasury.gov.au/coronavirus.
Meetings and workplace visits
We are taking preventative measures for the health and safety of Media Super members, employers and staff. We encourage employers to contact their Business Development Manager directly for support and further information.
The Media Super offices are closed to the public, and the teams are working from home.
Unfortunately, we are unable to meet with you in-person via workplace visits, appointments or meetings for the moment.
Additional information sources
Information about COVID-19 and the financial packages announced is frequently updating. To ensure you are up to date, please refer to the following websites:
We’re here to help
We understand these are uncertain and difficult times and, as always, will do our best to support employers where we can.
If you or your staff have questions about accessing your super or understanding the JobKeeper payment, please contact your Business Development Manager.
The Federal Government has announced economic stimulus packages to help individuals, businesses and sole traders. Information and full details for all payments and initiatives is available on the Treasury website.