Assessing agents’ eligibility for the JobKeeper subsidy
On 30 March 2020, the Federal Government announced a $130 billion support package which comprises a newly introduced JobKeeper subsidy which is designed to keep workers employed throughout the coronavirus (COVID-19) crisis. The subsidy will be paid to employers at a rate of $1,500 per fortnight for each eligible employee. In order to access this benefit, both the employer and employee must satisfy the requisite eligibility criteria.
Eligible Employer Test
Eligible employers will include all businesses, companies, partnerships, trusts, self-employed individuals, charities and not-for-profit organisations with:
- an annual turnover of less than $1billion that can demonstrate a loss of 30% or more of their revenue compared to a comparable period one year ago; or,
- an annual turnover in excess of $1 billion that can demonstrate a reduction of 50% in revenue compared to a comparable period one year ago.
Sole traders (including independent contractors and gig economy workers) will also be entitled to access the JobKeeper subsidy directly if they can satisfy the above turnover tests.
Eligible Employee Test
Each eligible employee must:
- be at least 16 years of age;
- be an Australian citizen, the holder of a permanent visa, a protected special category visa, a non-protected special category visa holder who has been residing continually in Australia for ten years or more, or a New Zealand citizen who is subject to a Subclass 444 special category visa;
- have been employed by an eligible employer as at 1 March 2020;
- be currently employed by an eligible employer (or have been stood down or re-hired);
- be either a full-time or part-time worker or a long-term casual (a casual must have been employed on a regular basis for at least 12 months as at 1 March 2020 to qualify); and,
- not already be receiving a JobKeeper subsidy from another eligible employer.
Application for the subsidy must be made by the eligible employer/sole-trader via ato.gov.au, and monthly reporting requirements (including declarations of recent business activity) will apply to ensure ongoing eligibility (presently capped at six months).
What does this mean for real estate agencies?
Assuming an agency meets the Eligible Employer Test set out above, principals may apply for the JobKeeper subsidy on behalf of each of their eligible employees. Principals who engage independent contractors will not be entitled to apply for the JobKeeper subsidy on behalf of the contractors. Rather, it will be a matter for each contractor to demonstrate that his/her business has suffered the requisite level of loss in order to satisfy the Eligible Employer Test prior to applying directly to the Australian Taxation Office.
If approved, participating employers must ensure that eligible employees are paid a minimum of $1,500 per fortnight before tax (regardless of whether they are ordinarily remunerated at a lower rate). For eligible employees whose ordinary income exceeds the JobKeeper subsidy, the employer is able (but not obliged) to top up the payment to ensure that they continue to be paid at their usual rate.
That is, the employer must top up the wage in order to at least meet any applicable minimum Award wage but any amount above that will be optional (although a written agreement must be entered into between the employer and employee in order to temporarily reduce the employee’s wage back to Award minimums).
In addition, individual employers may elect (but are not obliged) to pay superannuation on any JobKeeper payments made to employees. Any such superannuation costs would be borne by the employer. The employer must also continue to pay the superannuation guarantee on an eligible employee’s ordinary income.
The first payments will not be issued to employers until 1 May 2020 but will be backdated to 30 March 2020. Employees who receive the JobKeeper subsidy are required to disclose all other income and income support payments to Services Australia.
Noting that the legislation has not yet been finalised, there may be further changes to the package and so it may be prudent to await the passing of the legislation before taking any steps in reliance upon the package statements published to date.