JobKeeper 2.0 – What You Need To Know

JobKeeper 2.0 – What You Need To Know

The Government announced yesterday that they will be extending the JobKeeper payment by a further 6 months to 28 March 2021 and support will be targeted to businesses and not-for-profits that continue to be significantly impacted by the Coronavirus. The payment rate will be reduced and a lower payment rate will be introduced for those who work fewer hours. Other eligibility rules remain unchanged.

Eligibility

To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:

  • 50 per cent for those with an aggregated turnover of more than $1 billion
  • 30 per cent for those with an aggregated turnover of $1 billion or less
  • 15 per cent for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities)

If a business or not-for-profit does not meet the additional turnover tests for the extension period, this does not affect their eligibility prior to 28 September 2020. The JobKeeper Payment will continue to remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.

Speaking on Tuesday, the Prime Minister explained these changes in detail.

“The changes that we’re making, the first of those is to apply the JobKeeper test for the 30 per cent turnover reduction across the past two quarters and into the next quarter for the continuing eligibility out to the end of March of next year,” Mr Morrison said.

“There’ll be the next quarter after September, and then there’ll be the March quarter. In both cases, businesses will have the test re-applied in relation to their turnover and will be looking at their performance over the first six-month period of the program, and that will provide, where it’s needed, the gateway into the next phase of the program.”

Additional Turnover Tests

In order to be eligible for the JobKeeper Payment after 27 September 2020, businesses and not-for-profits will have to meet a further decline in turnover test for each of the two periods of extension, as well as meeting the other existing eligibility requirements for the JobKeeper Payment.

First JobKeeper Payment Extension – 28 September 2020 to 3 January 2021
In order to be eligible for the first JobKeeper Payment extension period, businesses and not-for-profits will need to demonstrate that their actual GST turnover has significantly fallen in both the June quarter 2020 (April, May and June) and the September quarter 2020 (July, August, September) relative to comparable periods (generally the corresponding quarters in 2019).

Second JobKeeper Payment Extension – 4 January 2021 to 28 March 2021
In order to be eligible for the second JobKeeper Payment extension period, businesses and not-for-profits will again need to demonstrate that their actual GST turnover has significantly fallen in each of the June, September and December 2020 quarters relative to comparable periods (generally the corresponding quarters in 2019).

Businesses and not-for-profits will generally be able to assess eligibility based on details reported in their BAS, however if a business or not-for-profit is not required to lodge a BAS, alternative arrangements will be put in place.

If a business or not-for-profit does not meet the additional turnover tests for the extension period, this does not affect their eligibility prior to 28 September 2020.

New JobKeeper Payment Rates

The previous flat rate payment approach of $1,500 per fortnight for eligible employees and business participants will change to a two tiered system.

From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:

  • $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • $750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:

  • $1,000 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average and for business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • $650 per fortnight for other eligible employees and business participants.

The government has confirmed that businesses and not-for-profits entering JobKeeper 2.0 will be required to nominate which payment rate they are claiming for each of their eligible employees or business participants.

Alternative Tests

The Commissioner of Taxation will have discretion to set out alternative tests where an employee’s or business participant’s hours were not usual during the February 2020 reference period. For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February 2020.

Guidance will be provided by the ATO where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances the general rules do not cover.

Making Payments to Employers

The JobKeeper Payment will continue to be made by the ATO to employers in arrears. Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper Payment (before tax), based on the payment rate that applies to each employee.

Employees

The eligibility rules for employees remain unchanged (click here for more information), however, the amount of the JobKeeper Payment will change at the rates set out above. 

To decipher what these recent changes mean for your business, we recommend using a reputable and experienced business advisor who can explain these updates in more detail.

Feel free to book in a time to speak with our 8 Collective Advisory team so we can start assisting you today.

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