'Job Keeper' allowance: Details of $1,500 coronavirus wage subsidy revealed

author-avatar By on March 30,2020
'Job Keeper' allowance: Details of $1,500 coronavirus wage subsidy revealed

Photo by Anggun Tan on Unsplash

Millions of Australians could have $1,500 per fortnight of their pay covered though a government plan to protect workers whose jobs are at risk because of the coronavirus crisis.

Under the $130 billion plan, which was announced today, businesses substantially impacted by the coronavirus can claim the fortnightly wage subsidy to help pay employee's wages for at least six months. 

Eligible businesses will receive $1,500 per eligible employee per fortnight. There will be a legal obligation to ensure these employers pass on the full wage subsidy to eligible employees. The ATO has released a guide for employers for more details on eligibility requirements.

Employers that are eligible to receive the $1,500 fortnightly payments include:

  • Businesses with a turnover of less than $1 billion that have a reduction in revenue of 30% or more since March 1 
  • Businesses with a turnover of $1 billion or more that have a reduction in revenue of 50% or more since March 1

Businesses that are subject to the major bank levy - ANZ, Commonwealth, NAB, Macquarie and Westpac - are excluded. 

Eligible employees for the wage subsidy include: 

  • Full-time workers
  • Part-time workers
  • Sole traders
  • Casuals who have been with their employer for at least 12 months
  • New Zealanders on 444 visas
  • Not-for-profit entities

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Provider
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frequency
 
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1.75% Annually,
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*Rates correct as at 28 May 2020. Rates based on a $50,000 deposit for 6 months.

From today, businesses eligible for the wage subsidy will be able to apply to the Australian Tax Office (ATO) via the ATO's JobKeeper page which means that employers will not have to deal with Centrelink to access the funds.

The fortnightly $1,500 payment will start to be issued from the first week of May and will be backdated to today.

If employees have been stood down by their employer since March 1, they are still eligible for these payments. 

The subsidy is around 70% of the median wage, and 100% of the median wage in the most heavily hit sectors like retail and hospitality.

As of 7pm March 30, over 30,000 businesses have applied for the JobKeeper wage subsidy.

Prime Minister Scott Morrison urged workers who have already been stood down to "ring up their employer". He also stressed people can not access both the Jobseeker and Jobkeeper payments.

The $130b wage subsidy is expected to last for six months for an estimated six million Australians whose livelihoods have been impacted by the coronavirus pandemic.

Treasurer Josh Frydenberg described the subsidy as more generous than similar measures in New Zealand and the United Kingdom.

"Our wage subsidy scheme for Australia is unlike those of other nations," he said.

"It is more generous to New Zealand's scheme, it is broader than the United Kingdom's scheme. Our scheme is uniquely Australian, with every eligible employee receiving the same wage subsidy."

Mr Frydenberg said the wage subsidy is designed to help businesses bounce back once the pandemic is over.

"The announcement today is all about providing additional income support and keeping employees connected to their employer, because once we get to the other side of this we want the recovery as speedy as possible," he told ABC News Breakfast.

Looking for a place to stash some cash? Below is a snapshot of some of the highest interest rates being offered on "Intro Rate" savings accounts. 

Provider
Total
interest
rate p.a.
Intro
interest
rate p.a.
Intro
term
Base
interest
rate p.a.
 
Saver Account
2.26% 1.21% 6 months 1.05% More details
2.25% 1.45% 4 months 0.80% More details
2.65% 1.30% 4 months 1.35% More details
2.20% 1.40% 4 months 0.80% More details
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*Data accurate as at 18 May 2020. Rates based on a savings balance of $10,000. Sorted by total interest rate. Refer to providers' websites for bonus rate conditions. Note that the base rate will apply once the introductory term has passed.

Mr Frydenberg said that in return for the wages being paid, businesses are expected to keep their staff employed during the pandemic.

"At the end of the day we want Australian businesses and their employees to get to the other side intact,” Mr Frydenberg said.

“And that’s why we’re looking at this wage subsidy measure because it’s all about ensuring there’s a connection between the employer and the employee through what is a very difficult time.

“There are legal obligations for that to occur. And of course our focus here is supporting the employee who has done it very, very tough and obviously needs that security, needs that surety that they will continue to get that income support."

Mr Morrison had previously ruled out a UK-style wage subsidy which involves paying up to 80% of a person's wage.

"We've been very careful to ensure that income support can be delivered in a way that gets it to people as quickly as possible using the existing systems that we have," Mr Morrison said.

"It's not a matter of just cutting and pasting ideas from other places."

Prime Minister Scott Morrison said yesterday the new scheme would form part of his Government's third economic assistance package which would be "bigger than anything you have so far seen".


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author-avatar
Emma joined Savings.com.au as a Finance Journalist in 2019. She is a journalist with more than five years experience across print, broadcast and digital media, with previous stints at Style Magazines, 4ZZZ radio, and as editor of The Real Estate Conversation. She's most passionate about improving the financial literacy of young women and millennials by writing about complex financial topics in a way that's easy for the average Joe (or Jill) to understand. When she's not writing about finance she's watching Greys Anatomy (again).

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