22 July, 2020 / IN Economy / by Paul Franks
On 21 July 2020, the Government announced that JobKeeper 1.0 will remain until 27 September 2020, and following this JobKeeper 2.0 will continue for a further 6 months to 28 March 2021 but with tighter access and reduced rates.

From 28 September 2020, employers seeking to claim JobKeeper payments will need to reassess their eligibility again and prove an actual decline in turnover.

If your business currently receives JobKeeper, your arrangements will generally remain unchanged until 27 September 2020. The JobKeeper 2.0 scheme changes the eligibility test for employers and the method and amount paid to employees.

Eligibility

One of the biggest changes under JobKeeper 2.0 is that it will be assessed on a continuous quarterly basis to be eligible to receive the JobKeeper 2.0 payments, whereas under the original JobKeeper roll out you only had to meet the decline in turnover test in one of the months or quarters.

Employers will need to reassess their eligibility with reference to actual GST turnover for the June and September 2020 quarters (for payments between 28 September to 3 January 2021), and again for the June, September and December 2020 quarters (for payments between 4 January 2021 to 28 March 2021).
.


  30 March to 27 September 2020 28 September to 3 January 2021 4 January 2021 to 28 March 2021

Decline in turnover Projected GST turnover for a relevant month or quarter is expected to fall by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.* Actual GST turnover in the June and September 2020 quarters fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same periods in 2019.

The decline for both quarters needs to be met to continue receiving JobKeeper payments.
.

Actual GST turnover in the June, September and December 2020 quarters fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same periods in 2019. The decline for all three of the quarters needs to be met to continue receiving JobKeeper payments.

* Alternative tests potentially apply where a business fails the basic test and does not have a relevant comparison period.
.

Alternative Tests

The Commissioner of Taxation will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019, in line with the Commissioner’s existing discretion.

Eligible Employers

The broad eligibility tests to access JobKeeper remain the same with an extended decline in turnover test as previously mentioned.

1 March 2020 is an absolute date. An employer that had ceased trading, commenced after 1 March 2020, or was not pursuing its objectives in Australia at that date, is not eligible.

Eligible Employees

Employee eligibility will remain broadly the same, but the value of the payment will change from 28 September based on average weekly hours in February 2020.

On 1 March 2020, an eligible employee:

  • Was aged 16 years and over
  • If the individual was aged 16 or 17, was either financially independent or was not undertaking full-time study
  • Was an employee other than a casual, or was a long-term casual*
  • Was an Australian resident (under the meaning of the Social Security Act 1991), or a resident for tax purposes and held a Subclass 444 (Special category) visa

And, at any point during the JobKeeper fortnight:

  • Was an employee of the employer
  • Was not an excluded employee:
    • An employee receiving parental leave pay or dad and partner pay, or
    • An employee receiving workers compensation payments in relation to total incapacity

And, has provided the JobKeeper Payment Employee Nomination to the employer:

  • Agreeing to be nominated by the employer as an eligible employee under the JobKeeper scheme
  • Confirming that they have not agreed to be nominated by another employer
  • If they are a long-term casual, they do not have permanent employment with another employer.

* A ‘long term casual employee’ is a person who has been employed by the business on a regular and systematic basis during the period of 12 months that ended on 1 March 2020.

JobKeeper Payments

The other biggest change is that the payments to employees have now been tiered between employees who have worked greater or equal to 20 hours or employees that have worked less than 20 hours. As you will see from the table below, the payment has been stepped down (for the top tier) from the original fortnightly payment of $1,500.
.


JobKeeper
.
30 March to 27 September 2020 28 September to 3 January 2021 4 January 2021 to 28 March 2021

Payment
  • $1,500 per fortnight per employee
  • $1,200 per fortnight per employee or business participant who worked >20 hours per week
  • $750 per fortnight per employee or business participant working <20 hours per week
  • $1,000 per fortnight per employee or business participant who worked >20 hours per week
  • $650 per fortnight per employee or business participant working <20 hours per week

.
Assessing if an Employee has worked 20 hours or more

JobKeeper payments from 28 September 2020 are paid at a lower rate for employees who worked less than 20 hours per week on average in the four weeks of pay periods before 1 March 2020.

The Commissioner of Taxation will have discretion to set out alternative tests for those situations where an employee’s or business participant’s hours were not usual during February 2020. Also, the ATO will provide guidance on how this will be dealt with when pay periods are not weekly.

What This Means for You
JobKeeper

Under current legislation the original JobKeeper scheme is still in place until 27 September 2020. If you are currently receiving the JobKeeper payment, then nothing will change until this date.

If you are not receiving the payment you are still entitled to meet the decline in turnover test. Under the current legislation this means that only one month or quarter needs to be satisfied and you can still register for the months of July, August and September 2020.

JobKeeper 2.0

Under JobKeeper 2.0 we have more time to sort through this eligibility criteria as the payments do not take effect until 28 September 2020.

The first step in reviewing eligibility requirements is to see if you meet the decline in turnover test for the June 2020 Quarter. If you don’t meet this test, then you are not eligible for the JobKeeper 2.0 payments. Please note that failing this test does not impact on the currently receiving JobKeeper payments.

If you do pass this test, then the September 2020 BAS will then need to be tested to see if the 30% decline in turnover test is met. If this is not met, then you are not eligible for the JobKeeper 2.0 scheme. If the test has passed, then you would be entitled to the first round of payment for the period 28 September 2020 to 3 January 2021.

Once you fail the eligibility tests, then your business cannot re-join and ceases the JobKeeper scheme.

Please call, email, or get in contact with your Business Advisor or contact us below and we can help you work through this.

Contact Us For Assistance