COVID-19
Economics
Policy
$1,500 per fortnight per employee from new Fed support package
Jason Roberts
Mar 30, 2020
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The Federal Government has announced a third set of stimulus measures in response to the COVID-19 pandemic which includes a new wage subsidy of $1,500 per employee, per fortnight to be paid to businesses for a six month period.
Designed to provide financial relief to both employers and employees who have been impacted by the pandemic, the Government hopes that the package will cushion the severe economic disruption caused as a result of COVID 19.Although the new subsidy will be welcomed by operators across the early childhood education and care (ECEC) sector who have without exception been heavily impacted by the COVID-19 virus, it will still fall short of hopes that a more tailored ECEC solution would be forthcoming.
That being said the release does note that “The Government will provide updates on further business cashflow support in coming days” providing the sector with further hope that the National Cabinet meeting to be held Friday 3 April will yield a solution specific for the ECEC sector.
New package to provide cash relief to business owners and their employeesThe centre piece of this latest round of support is a $130 billion JobKeeper wage subsidy which will see businesses receive $1,500 from the Government every fortnight for the six months commencing 1 March 2020 for each employee that they retain and employees that have been stood down who are still on their books.
As Prime Minister Scott Morrison noted “This is about keeping the connection between the employer and the employee and keeping people in their jobs.”
The subsidy will be made available to all businesses that are:
- Employers with less than $1 billion of annual turnover that have experienced a 30 per cent drop in revenue since 1 March 2020. Businesses structured as companies, partnerships, trusts and sole traders and not for profit organisations including charities will qualify
The subsidy can then be paid direct from the business to employees that are:
- Full time and part time employees, including long term casuals that have been employed for at least 12 months, that were on the books at 1 March 2020
- Any employees that have been stood down since 1 March 2020
- Employees that fulfil the first two criteria and are Australian residents, New Zealand citizens in Australia working on a 444 visa and migrants who are eligible for JobSeeker payment or Youth Allowance
It is anticipated that the vast majority of ECEC providers and ECEC employees will meet these criteria.
Self employed individuals are also eligible to receive the payment from the Government if they can self assess the revenue reduction of 30 per cent or more criteria. No eligible employee can receive more than one payment from more than one employer.
The program will commence today, 30 March 2020, with cash payments flowing back to providers in the first week of May. Those providers that are able to continue to support their workforce, cash flow wise, are able to start paying the $1,500 per fortnight to eligible employees immediately and will be reimbursed by the Government in early May.
Income Support Payment Thresholds raised for JobSeeker paymentsIn addition to the JobKeeper wage subsidy for business the plan includes a temporary relaxation of the partner income test, to ensure that an eligible person can receive the JobSeeker payment and the associated Coronavirus supplement.
The new rule is effective if an applicant's partner earns less than $3,068 per fortnight and around $80,000 per annum.
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