JobKeeper Payment 2.0 – all you need to know

Marketing & Communications Manager - AFS & Associates Chartered Accountants

Following months of speculation the Government has announced the JobKeeper Program will be extended beyond September 2020, to March 2021.

It is important to note if you currently receive JobKeeper Payments it remains unchanged until 27 September 2020.

However, to receive the new JobKeeper Payments from 28 September 2020, the eligibility will be based on actual turnover change rather than projected change which was used when businesses first applied.

In brief:

  • From 28 September 2020 businesses will need to reapply and pass a new test to demonstrate a 30% turnover reduction. The new test will be based on actual GST turnover from June 2020 and September 2020 BAS versus actual GST turnover for June 2019 and September 2019 BAS.
  • From 28 September payment rates will drop and two tiers will be introduced:
    • dropping to $1,200 per fortnight, or
    • $750 per fortnight for employees working less than 20 hours a week
  • From 4 January 2021 payments drop again to:
    • $1,000 per fortnight, or
    • $650 for employees working less than 20 hours a week

This update is relevant for the second round of the JobKeeper Payment from September 2020 – March 2021. For details on the current JobKeeper program from March 2020 – September 2020 please see our previous blog: https://www.afsbendigo.com.au/jobkeeper-payments-everything-you-need-to-know/

Business eligibility

From 28 September 2020, businesses and not-for-profits seeking to claim the JobKeeper Payments will be required to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover).

This will be based off turnover during both the June 2020 quarter (April, May and June) and the September 2020 quarter (July, August, September), relative to comparable periods in 2019.

To be eligible, businesses must have experienced:

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

Businesses should be able to assess this eligibility criteria based on details reported in their Business Activity Statement (BAS). Alternative arrangements will be put in place for businesses and not-for-profits that are not required to lodge a BAS.

Businesses will need to assess their eligibility for JobKeeper in advance of the BAS deadline as the deadline to lodge a BAS for the September quarter or month is in late October, and the December quarter (or month) BAS deadline is in late January for monthly lodgers or late February for quarterly lodgers.

Additional turnover 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. Information about the existing discretion can be found at https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/JobKeeper-tests/Applying-the-turnover-test/?anchor=Alternativetest#Alternativetest

Employee eligibility

The eligibility rules for employees remain unchanged. Employees will be eligible if they:

  • are currently employed by an eligible employer (including if you were stood down or rehired)
  • were employed full-time, part-time or fixed-term, or a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020 and not a permanent employee of any other employer.
  • were aged 18 years or older at 1 March 2020 (if 16 or 17 you can also qualify for fortnights before 11 May 2020, and continue to qualify after that if you are independent or not undertaking full time study).
  • were an Australian resident or an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020.
  • were not in receipt of government parental leave or Dad and partner pay or a payment in accordance with Australian worker compensation during the JobKeeper fortnight.

The self‐employed will be eligible to receive the JobKeeper Payment where they meet the relevant turnover test, and are not a permanent employee of another employer.

Payment rates

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

  • $1,200 per fortnight for all eligible employees who worked more than 20 hours a week on average in the four weeks of pay periods before 1 March 2020
  • $750 per fortnight for other eligible employees.

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

  • $1,000 per fortnight for all eligible employees who worked more than 20 hours a week on average in the four weeks of pay periods before 1 March 2020
  • $650 per fortnight for other eligible employees.

Where an employee’s hours were not usual during the February 2020 reference period, the Commissioner of Taxation will use discretion. For example an employee may have been on leave, volunteering during the bushfires, or not employed for all or part for February 2020.

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.

The JobKeeper Payment will continue to be made by the ATO to employers in arrears.

Businesses will be required to nominate which payment rate they are claiming for each of their eligible employees.

 

If you have any questions about JobKeeper Payments and your business, client or not, please give AFS & Associates a call on 03 5443 0344 or email afs@afsbendigo.com.au

We are here to help.

 

For more information on other financial support available for individuals and businesses impacted by COVID-19 please see our rolling update blog: https://www.afsbendigo.com.au/round-two-covid-financial-support-need-know/

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