Advocacy Alert: Wage Subsidy at the Heart of $130 billion Additional Economic Response

30th March 2020

  • Additional $130 billion Federal Government relief package delivered over six months to businesses to support staff through a $1,500/fortnight wage subsidy
  • Payments backdated to 1 March 2020 and expected to flow from May
  • Brings total Federal Government support to $320 billion
  • Partner income means testing increased from $48,000 threshold to almost $80,000

This afternoon the Prime Minister announced the Federal Government's third and most substantial economic package to support Australian businesses and jobs through the ongoing impacts of coronavirus over the next six months.

Further measures to support the business community and a wage subsidy were at the heart of this package with $130 billion allocated over the next six months to support up to six million Australians.

This is an unprecedented level of support for an extraordinary situation and it's announcements like these that will keep our economy moving through an exceptionally difficult time. These announcements also provide some certainty and reassurance to our community which is already under so much pressure and stress.

The wage subsidy is something businesses across North Queensland were calling for during a time no revenue is coming in, but are trying to keep as many employees on the books as long as possible. Many of our members have been noting the wage subsidy schemes in New Zealand and the UK, and the Prime Minister indicated this scheme is more generous than New Zealand's and broader than the UK scheme.

For those who have sadly been recently stood down, this wage subsidy also allows employers to reevaluate those decisions because if they were on the books at 1 March 2020, they are still eligible for this new payment. For some, this subsidy - especially in the industries hit the hardest - this could be up to 100% of their wage.

We have fielded several concerns from our members who were also falling through the cracks of support measures so far due to the criteria placed on Job Seeker payments and partner income testing. Today we welcome the confirmation that the partner income test threshold would now be increased to $79,762 from $48,000.

Key points of wage subsidy eligibility criteria:

  • JobKeeper cash payments of $1500/fortnight paid to businesses to pay employees (roughly equates to 70% of the median wage)
  • Cannot double up if you are already receiving welfare payments, but can transfer from JobSeeker to JobKeeper.
  • Available to all Full Time, Part Time, Self Employed and Sole Traders. For Casuals to qualify they must have been with the employer for 12 months or more prior to being stood down.
  • Turnover of business will need to have fallen between 30% or more during the COVID-19 crisis to be eligible.
  • Payment will be made in May, but will be back dated today 30 March 2020. Payment will be delivered through the ATO.
  • Partner income test will be extended to $79,762 from $48,000 to access JobSeeker
  • Not for Profits and New Zealand citizens residing in Australia on 444 visas are eligible

Click below links for further details:
Prime Minister's Announcement
Job Keeper Payment | Australian Taxation Office

The Prime Minister noted that Federal Parliament will be recalled for an emergency session to enable this significant legislation to progress. He advised that it won’t be this week as it will take that time to complete the drafting and that they will be seeking the cooperation of the Opposition to assist. It was also mentioned by the Prime Minister during questions from the Press Gallery that the Federal Government is also in considerations over a rental assistance program to further support Australians.

The Treasurer labelled this plan as an economic lifeline to protect the economy in the months ahead and the generations that will follow. We applaud the Federal Government's continued focus on keeping Australians in jobs and businesses in business as we navigate through this double-edged sword of an unprecedented health and economic crisis.

We know however the mechanics of how this package is implemented is as important as the announcement and there will be many questions over the coming hours and days.

We will continue providing your feedback to our political representatives at all levels of government, not just to unpack this announcement, but to also aid further initiatives as we navigate through this crisis together.

Click here for our dedicated page on COVID-19 support measures, services, and daily round-ups of government announcements, as well as a series of videos on how to best prepare your business for potential impacts

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