Are you aware of the adjustments to JobKeeper and how they affect you?
As many of you are aware, the Government recently announced that JobKeeper payments will be extended until 28 March 2021, with payments being made over two separate extension periods.
The extension periods are:
- Extension period 1, which covers the seven new JobKeeper fortnights that commence on 28 September 2020 and end on 3 January 2021
- Extension period 2, which covers the six new JobKeeper fortnights that commence on 4 January 2021 and end on 28 March 2021
From 28 September 2020, the revised JKP scheme (referred to as ‘JobKeeper 2.0’) would be less generous (i.e., being subject to a new dual payment rate system) and would require businesses and not-for-profits to apply a new ‘Decline in Turnover Test’ based on their actual GST turnover (as opposed to their projected GST turnover).
On 7th August 2020, the Government announced adjustments to expand the eligibility criteria for the JobKeeper 2.0 Payment Scheme, now referred to as ‘JobKeeper 3.0’.
Eligible employers will receive the JobKeeper payment for each eligible employee that was on their books on 1 July 2020 and continues to be engaged by that employer, including full-time, part-time, long-term casuals, and stood down employees. This applies to employers who are currently receiving JobKeeper.
Casual employees eligible for the JobKeeper Payment will still be required to have been employed on a regular and systematic basis for at least the previous 12 months as at 1 July 2020.
To be eligible, an employee must be an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder as at 1 July 2020. The employee must also be a resident for Australian tax purposes on 1 July 2020. Employees must be a permanent employee of the employer or, if a long-term casual employee, not a permanent employee of any other employer.
The ‘Decline in Turnover Test’
To qualify for the JobKeeper Payment extension periods, businesses will now only have to demonstrate that their actual GST turnovers have significantly decreased in the previous quarter under JobKeeper 3.0.
For these purposes, the applicable rate of decline in turnover required to qualify for JobKeeper 3.0 is determined in accordance with the existing rules (i.e., 50% for entities with an aggregated turnover of more than $1 billion, 30% for entities with an aggregated turnover of $1 billion or less and 15% for ACNC-registered charities).
Specifically, to be eligible for the JobKeeper Payment Extension Period 1 (i.e., from 28 September 2020 to 3 January 2021), businesses only need to demonstrate a significant decline in turnover in the September 2020 quarter (whereas under the previously announced JobKeeper 2.0, they would have been required to show that they had suffered a significant decline in turnover in both the June and September 2020 quarters).
To be eligible for the JobKeeper Payment Extension Period 2 (i.e., from 4 January 2021 to 28 March 2021) businesses only need to demonstrate a significant decline in turnover in the December 2020 quarter (whereas under the previously announced JobKeeper 2.0, they would have been required to show that they had suffered a significant decline in turnover in each of the June, September and December 2020 quarters).
The dual payment rate system originally proposed in JobKeeper 2.0 will remain, with the full rate of payment decreasing from $1,500 to $1,200 per fortnight from 28 September 2020 and then to $1,000 per fortnight from 4 January 2021. The proposed reduced rates (being $750 from 28 September 2020 and $650 from 4 January 2021) will also remain for employees and business participants who worked fewer than 20 hours per week in the relevant period.
Additional information is available here.
If you have any questions or would like to discuss these updates further, please do not hesitate to contact our office on (02) 4732 3844 or email firstname.lastname@example.org