JobKeeper 2.0

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September 30, 2020

JobKeeper 2.0

The first round of JobKeeper ended on 27 September 2020. The Government has decided the scheme will continue for an additional 6 months until 28 March 2021.

Key changes:

  • More employees are eligible for JobKeeper
  • The eligibility rules will be revised
  • The payment rates will be reduced

To receive JobKeeper from 28 September 2020, employers need to reassess their eligibility with reference to actual GST turnover for the September 2020 quarter (28 September 2020 to 3 January 2021), and again for December 2020 quarter (4 January 2021 to 28 March 2021).

From 28 September 2020, there are some significant changes to the JobKeeper Scheme. But where existing eligibility criteria is not specifically modified, it remains in place.

The key changes are summarised below:

  • The Jobkeeper Scheme will be extended for a further six months from 28 September 2020 to 28 March 2021, under a two-tiered payment system. 
  • For the first quarter of JobKeeper 2.0 (28 September to 3 January 2021), the JobKeeper Payment will be:
    • $1200 per fortnight for eligible employees that worked for 20 hours or more a week on average, and for business participants who were actively engaged in the business for more than 20 hours per week, in the four weeks before 1 March 2020.
    • $750 per fortnight for eligible employees that, worked for less than 20 hours a week on average, and for business participants who were actively engaged in the business for less than 20 hours per week in the same period, in the four weeks before 1 March 2020.
  • For the second quarter of JobKeeper 2.0 (4 January 2021 to 28 March 2021), the JobKeeper Payment will be::
    • $1000 per fortnight for eligible employees that worked for 20 hours or more a week on average, and for business participants who were actively engaged in the business for more than 20 hours per week, in the four weeks before 1 March 2020.
    • $650 per fortnight for eligible employees that worked for less than 20 hours a week on average, and for business participants who were actively engaged in the business for less than 20 hours per week, in the four weeks before 1 March 2020.

Eligibility

  • From 28 September 2020, eligibility for the JobKeeper Payment will be assessed based on actual turnover
  • To be eligible for JobKeeper Payments for the first quarter of JobKeeper 2.0 entities will need to meet a modified decline in turnover test. Entities will need to show that they have met the decline in turnover test in the June and September 2020 quarters, with reference to their actual GST turnover and relative to comparable periods (generally the corresponding quarters in 2019). Existing decline in turnover percentage requirements, (ie 50%, 30% and 15%) will remain in place.
  • To be eligible for JobKeeper Payments for the second quarter of JobKeeper 2.0, entities will need to meet a modified decline in turnover test. Entities will need to show that they have met the decline in turnover test in the June, September and December 2020 quarters, with reference to their actual GST turnover and relative to comparable periods (generally the corresponding quarters in 2019). Existing decline in turnover percentage requirements, (ie 50%, 30% and 15%) will remain in place.
  • The JobKeeper Payment will remain open for new recipients that may become eligible in the extended periods.

The two-tiered payment system adds a further degree of complexity and, ultimately, employers and their advisers will be responsible for getting it right. In determining which rate an employee will be eligible for, the eligible business will be required to nominate a rate for each eligible employee.

Most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility. However, as the BAS deadlines are generally not due until the month after the end of the quarter, eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees. However, the ATO will have discretion to extend the time an entity has to pay employees in order to meet the wage condition.

Alternative arrangements are expected to be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group).

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.

Were you to have questions regarding the upcoming changes to JobKeeper, please do not hesitate to get in touch.

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