The Government has announced this afternoon its third tranche of economic relief in an historic $130billion Jobkeeper payment bringing the total economic support package across all three packages to $320billion or 16.4% of GDP.
The Banks have announced they will allow commercial landlords to delay loan repayments by up to 6 months.
The Fair Work Commission has varied the changes to the Clerks Award affecting 1.56 million employees.
See details below.
1. NEW: Government relief package #3: “Jobkeeper payment”
This afternoon, the Federal Government announced the ‘Jobkeeper payment’, an initiative to help employers keep employees in their jobs. The initiative brings the Government’s total economic support in relation to the economy to $320 billion. In case you missed it, the PM’s announcement can be found here.
The Department of Treasury’s factsheet is here. The Parliament will be recalled to pass these changes.
The key features of the Jobkeeper payment are as follows:
What is the Jobkeeper payment?
A payment of $1,500/fortnight (before tax), to be paid by eligible employers to their eligible employees, for a period of up to six months. Eligibility criteria is below.
The amount has been calculated to equate to around 70% of the national median wage.
What does the Jobkeeper payment target?
The Jobkeeper payment is being instituted to maintain connections between employees and employers, so that even if a business needs to ‘hibernate’ for a few months, its workforce can be sustained for when the business is able to start up again.
How will payment be deployed?
The payments are subsidies for employers, meaning that the payments will be made directly to the employer, to then be paid to eligible employees via the normal payroll process.
What kinds of employers are eligible?
Eligible employers may include those with a company, partnership or trust structure. Sole traders and not-for-profits may also be eligible employers.
Employers will be eligible if:
an employer can demonstrate a reduction* in revenue of 30% relative to a comparable period a year ago (of at least a month) where the employer’s annual turnover is less than $1 billion; or
an employer can demonstrate a reduction* in revenue of more than 50% relative to a comparable period a year ago (of at least a month) where the employer’s annual turnover of $1 billion or more; and
the business is not subject to the major bank levy.
*reductions are at least 1 month, are self-assessed and must have occurred since 1 March 2020.
Which employees are eligible?
Full-time, part-time employees and casuals (employed on a regular basis), if they have been with their employer for the last 12 months.
The employee must have been employed as at 1 March 2020, and their employment with the business must be ongoing (even if they are not actually working – e.g. if they have been stood down or re-hired).
Australian residents, New Zealand citizens holding a subclass 444 special category visa, and migrants eligible for either the JobSeeker Payment or Youth Allowance, may be eligible employees.
An employee can claim Jobkeeper payment from one employer only.
When does the initiative start?
The first payments will be received by employers in early May from the Australian Tax Office (ATO).
Payments from the ATO will continue monthly, for up to six months.
Eligible employers may begin distributing Jobkeeper payments from today, to be reimbursed from May.
Eligible employers can apply for the Jobkeeper payment initiative online.
JobSeeker Payments: The Government also announced that it will relax the the partner income test for JobSeeker Payments to ensure that an eligible person can receive the JobSeeker Payment and associated Coronavirus Supplement providing his or her partner earns less than $3,086/fortnight (around $79,762 p.a).
2. NEW: Australian Banks announce deferral of business loan repayments up to $10million
The Australian Banking Association (ABA) has announced this afternoon (see media release) that participating banks will defer loan repayments for 98% of all businesses affected by COVID-19 for six months for business loan facilities of up to $10 million (an increase from the previously announced $3 million threshold), where your business is affected by COVID-19. Other loans and overdrafts are also available and all business customers have been encouraged to contact their banks.
FAQs for this announcement are linked here.
The ABA’s CEO, Anna Bligh has said “This will help protect many more thousands of small businesses from being evicted if they are struggling to pay the rent as it covers approximately 90% of commercial property owners who have loans with an Australian bank.”
3. UPDATE: Clerks Award amended by Fair Work Commission
Following a joint application made by ACCI, Ai Group, the ACTU and ASU, on Saturday 28 March 2020, the Full Bench of the Fair Work Commission amended the Private Sector Clerks Award 2010. The amendments will impact 1.56 million employees and take effect from 28 March 2020 and remain in place until 30 June 2020 (unless extended by further application).
In what is a remarkable joint application, the ACCI and Ai Group acknowledged and commended the lead the ASU (supported by the ACTU) took in driving the changes. IR Minister Christian Porter (who intervened in the application) acknowledged and congratulated the parties in the agreement and acknowledged “their preparedness to respond collaboratively to find practical solutions to reduce hardship suffered by employers and employees created by this extraordinary crisis.”
A copy of the decision is here. The terms of the variation to the Award are on page 25 and a summary of the changes provided by the ASU are at page 23 of the decision.
The key changes which embrace greater flexibility are:
employees performing all duties within skill and competency regardless of classification;
adjusting the minimum shift down to 2 hours for part/time and casual employees working from home; adjusting Ordinary Hours of Work for employees working from home to spread between 6am and 11pm (weekdays) and 7am to 12.30pm (Saturday); agreed reduction in ordinary hours of work (at least 75% of F/T and P/T employees required;
taking extra annual leave at reduced rates;
reducing notice period an employer gives employees of annual leave for a close down to 1 week.
Don’t forget NSW amended the Long Service Leave Act and Payroll Tax benefits which is discussed in our post “COVID-19 Wrap Up” published on 27 March 2020, below.