The federal government has announced it will provide a historic wage subsidy to around six million workers amid the coronavirus crisis.

Announced on Monday, the $130 billion JobKeeper payment is designed to help keep Australians in jobs as they tackle the significant economic impact from the COVID-19 pandemic.

The payment will be open to eligible businesses that receive a significant financial hit caused by the coronavirus, and will provide the equivalent of around 70 per cent of the national median wage.

For workers in the accommodation, hospitality and retail sectors, the government said the payment will equate to a full median replacement wage.

How it works

The payment will be paid to employers, for up to six months, for each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by that employer.

Employers will receive a payment of $1,500 per fortnight per eligible employee. Every eligible employee must receive at least $1,500 per fortnight from this business, before tax.

The program kicked off yesterday, with the first payments to be received by eligible businesses in the first week of May as monthly arrears from the ATO.

Eligible businesses can begin distributing the JobKeeper payment immediately and will be reimbursed from the first week of May.

Eligible employers will be those with annual turnover of less than $1 billion who self-assess that have a reduction in revenue of 30 per cent or more since 1 March 2020 over a minimum one-month period.

Employers with an annual turnover of $1 billion or more would be required to demonstrate a reduction in revenue of 50 per cent or more to be eligible. Businesses subject to the Major Bank Levy will not be eligible.

Eligible employers include businesses structured through companies, partnerships, trusts, and sole traders. Not-for-profit entities, including charities, will also be eligible.

Full-time and part-time employees, including stood-down employees, are eligible to receive the JobKeeper payment. Where a casual employee has been with their employer for at least the previous 12 months, they will also be eligible for the payment.

An employee will only be eligible to receive this payment from one employer.

Eligible employees include Australian residents, New Zealand citizens in Australia who hold a subclass 444 special category visa, and migrants who are eligible for JobSeeker Payment or Youth Allowance (Other).

Self-employed individuals are also eligible to receive the JobKeeper payment.

Eligible businesses can apply for the payment online and are able to register their interest via the ATO’s website.

Prime Minister Scott Morrison said the government will provide updates on further business cashflow support in coming days.

“We will give millions of eligible businesses and their workers a lifeline to not only get through this crisis, but bounce back together on the other side,” Morrison said.

“This is about keeping the connection between the employer and the employee, and keeping people in their jobs even though the business they work for may go into hibernation and close down for six months.

“When the economy comes back, these businesses will be able to start again and their workforce will be ready to go because they will remain attached to the business through our JobKeeper payment.”

Industry bodies welcome new package with open arms

Simon Westaway, executive director at the Australian Tourism Industry Council, said the government’s new funding package represented a genuine lifeline and offer of hope to Australian tourism enterprises, with most already facing their darkest hour.

“We naturally urge for the return of federal parliament and address this package of major significance swiftly and with appropriate scrutiny but bipartisan backing,” he said.

“Nobody is kidding themselves – the road back for many Australian tourism businesses is going to be incredibly tough. Our international border still remains closed, and a number of states and territories have shut themselves off to interstate visitors.

“The solution is simple. For our industry to again prosper to its once lofty heights, we need to get on top of COVID-19. But we also need a tourism industry still with oxygen in its veins to effectively pivot and seize the genuine future opportunity the visitor economy is for our nation and the one million people we employ.

“The public health, safety and well-being of our fellow Australians must always remain our number one national priority, and none more so than at this time.

“Our industry has stood solidly as one behind the all-of-government decisions that are designed to ensure this remains the case in facing the headwinds of COVID-19.”

Dean Long, CEO of the Accommodation Association of Australia (AAoA), said also strongly endorsed the new wage subsidy.

“This wage subsidy provides essential support for employers as they seek to retain jobs and ensure their businesses are operational once Australia emerges from this pandemic”, he said.

“In particular, we welcome the application to all employees and business, irrespective of turnover. The key criteria is loss of turnover.

“As the second-largest employer in the tourism industry, employees are the lifeblood of our hotels, and we welcome this support, which ensures that when the industry rebounds they are there to drive even greater growth.”

Tourism Accommodation Australia CEO Michael Johnson said the JobKeeper payment will help accommodation hotels to retain a skilled workforce as occupancy rates across the nation fall to historic lows.

“I want to thank the Prime Minister and the federal government for the ongoing support they are providing to the accommodation sector throughout this challenging time, and the Labor Opposition for supporting it,” he said.

“At present, it’s all too obvious our industry is on its knees, with current occupancy rates falling below 10 per cent and many hotels being forced to close indefinitely.

“From the start, our priority has been the health and welfare of our staff and patrons. This new package will allow hotels to keep valuable employees engaged, off the Centrelink queues and preparing for recovery later this year.

“We will continue to work closely with governments, industry stakeholders and the broader community to ensure the continued support of our members and their staff.

“We will find our way through this together. We are a strong and united industry which will meet our challenges head-on and continue working together to find solutions.”