JobKeeper vs JobSeeker Payments

A summary of the benefits relating to the 2 main incentives the federal government is offering to taxpayers

CEO Richard Suttie

By Richard Suttie

With COVID-19 turning our worlds upside down for the begging of 2020, it can be hard to understand exactly what help we’re eligible for. 

The State and Federal Governments have implemented a number of initiatives to assist Australians that have lost their income as a result of COVID-19, we have provided a summary of the two main income assistance packages available. 

Basically;
Under the JobKeeper Payment scheme – an eligible employee will receive (through their employer) minimum fortnightly salary income of $1,500.
Under the JobSeeker Payment scheme – an eligible employee (assuming they are single with no children) would be expected to receive a fortnightly payment of up to around $565.70 plus the $550 coronavirus supplement (resulting in a total fortnightly payment of up to around $1,115). However, the JobSeeker recipients may also be eligible for other government entitlements.

The JobKeeper scheme offers $1,500 per fortnight to employees who;

  • Are currently employed by the eligible employer (including those stood down or re-hired)
  • Were employed by the employer at 1 March 2020
  • Are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020)
  • Are at least 16 years of age
  • Are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder
  • Are not in receipt of a JobKeeper Payment from another employer.
 

Eligible Employers will be paid $1,500 per fortnight per eligible employee. These payments will be made one month in arrears commencing in May. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top up the payment.

Where employers participate in the scheme, their employees will receive this payment as follows.

  • If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements.
  • The JobKeeper payment will assist their employer to continue operating by subsidizing all or part of the income of their employee(s).
  • If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum $1,500 per fortnight, before tax.
  • If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If an employee who was employed on 1 March 2020, subsequently ceased employment with their employer, and has then been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.
 

Superannuation Considerations 
We understand, but it is not yet confirmed that employers will be liable to pay superannuation contributions of 9.5% on the $1500 payment except when an employee’s normal wage is less than $1,500 per fortnight (say $1000).
In this situation we believe that super will be payable as follows;
Normal pay                $1,000                    Super liabilities $95.00
Additional pay            $500                       Super is optional

Other Considerations
Employers need to consider the following;

  • Will Payroll Tax liabilities arise – at present we have not heard from state government as to how they intend to treat the payments;
  • Will Workers Compensation be payable on the Job Keeper payments; and
  • Will leave entitlements accrue on the JobKeeper payments.

Unfortunately, at present these issues have not been addressed.
Whilst the Job Keeper Payments are higher than the JobSeeker payments, employers need to be aware of potential on costs which as yet have not yet been clarified.

We have linked the registration forms for both the Job Keeper payment and the Victorian state government business support fund grant.

Disclaimer

Richard E Suttie Pty. Ltd. Trading as Suttie Financial Group.

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