Jobkeeper 2.0 – new eligibility and new rates

On 15 September 2020, the Treasury has released the Amendment Rules in relation to the Jobkeeper extension (Jobkeeper 2.0) that was legislated on 16 September 2020. The new extension rules will apply from 28 September 2020 onwards to 28 March 2021 and it will affect all Jobkeeper participants, including employees and business participants. 

In short: 

  • Businesses need to reassess their eligibility criteria from 28 September 2020 onwards in order to continue to qualify for Jobkeeper, and again on 4 January 2021. 
  • Payment rate will be reduced for both employees and business participants, and be split into tiers, depending on the number of hours worked 

Eligibility criteria for Jobkeeper 2.0 – decline in turnover test 

In order to be eligible for the JobKeeper Payment from 28 September 2020, businesses 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. 

Between 28 September 2020 to 3 January 2021 (Jobkeeper extension 1), businesses will need to demonstrate that their actual GST turnover has fallen in the September quarter 2020 relative to a comparable period. 

Between 4 January 2021 to 28 March 2021 (Jobkeeper extension 2), businesses will need to demonstrate that their actual GST turnover has fallen in the December quarter 2020 relative to a comparable period. 

For both periods, businesses need to prove that their turnover in the current quarter has dropped by: 

  • More than 30% when compared to a comparable period if your aggregated turnover is under $1 billion 
  • More than 50% when compared to a comparable period if your aggregated turnover is over $1 billion 

For businesses that do not have a relative comparable period (or have special circumstances), the ATO will release information on the alternative test methods. 

It is important to note that the BAS lodgement due dates (September & December 2020) are after the period where businesses can assess and declare the Jobkeeper eligibility to ATO (usually 14 days after end of month), this means that businesses need to take action soon to assess their eligibility and ensure they satisfy other conditions in order to continue being eligible for Jobkeeper extension payments after 28 September 2020. 

Payment rates 

Current Jobkeeper payments are $1,500 per fortnight for both eligible employees and business participants.  

From 28 September 2020 onwards the payment rates will be split into 2 tiers: 

  • Tier 1: For employees and business participants who work 20 hours or more per week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average: $1,200 per fortnight 
  • Tier 2: For all other employees and business participants: $750 per fortnight 

From 4 January 2020 onwards the payment rates will be dropped further: 

  • Tier 1: For employees and business participants who work 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration to that effect: $1,000 per fortnight 
  • Tier 2: For all other employees and business participants: $650 per fortnight 

Other conditions 

Wage condition: 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. 

Employee eligibility 

Employees are eligible in the extension period if they:  

  • are currently employed by an eligible employer (including if you were stood down or rehired)  
  • were for the eligible employer (or another entity in their wholly-owned group) either:  
  • a full-time, part-time or fixed-term employee at 1 July 2020; or  
  • a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer.  
  • were aged 18 years or older at 1 July 2020 (if you were 16 or 17 you can also qualify if you are independent or not undertaking full time study).  
  • were either:  
  • an Australian resident (within the meaning of the Social Security Act 1991); 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 July 2020.  
  • were not in receipt of any of these payments during the JobKeeper fortnight:  
  • government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010; or  
  • a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work.  

Employee can only claim Jobkeeper payment from one employer. Only under very limited circumstances can one employee change from one employer to another to claim Jobkeeper payment. 

Employees will continue to receive Jobkeeper payment if their employers satisfy the wage condition (see above) and are eligible to claim Jobkeeper payment on their behalf. 

Business owners can continue to receive Jobkeeper payment if their businesses satisfy the turnover test and they are not a permanent employee of another employer. 

Action points 

From 28 September 2020, all of the following must be done: 

  • work out if Tier 1 or Tier 2 rate applies to each of your eligible employees and/or eligible business participants 
  • notify us and your eligible employees and/or eligible business participants what payment rate applies to them 
  • during Jobkeeper extension 1 – ensure your eligible employees are paid at least 
  • $1,200 per fortnight for Tier 1 employees 
  • $750 per fortnight for Tier 2 employees 
  • during Jobkeeper extension 2 – ensure your eligible employees are paid at least 
  • $1,000 per fortnight for Tier 1 employees 
  • $650 per fortnight for Tier 2 employees. 
  • And, at the same time, remember to complete your September monthly declaration and submit it by 14 October 2020. 

Point to note 

You do not need to re-enrol for the Jobkeeper extension if you are already enrolled for Jobkeeper for fortnights before 28 September 2020. 

You do not need to reassess employee eligibility or ask employees to agree to be nominated by you as their eligible employer if you are already claiming for them before 28 September 2020. 

You do not need to meet any further requirements if you are claiming for an eligible business participant, other than those that applied from the start of Jobkeeper relating to holding an ABN, and declaring assessable income and supplies. 

Help is here! 

If you require assistance with assessing your eligibility to the Jobkeeper extensions, lodging monthly declarations and any other questions in relation to Jobkeeper – we are here to help! Give us a call or email and help will be on the way. 

Disclaimer: Please note that the information above is accurate as of 17 September 2020, any further updates will be included in our other blog posts.

JobKeeper 2.0 – what’s next?

The second tranche of the JobKeeper scheme changes the eligibility test for employers and the method and amount paid to employees.

Eligibility

To continue receiving JobKeeper payments, 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).

Eligible employers

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

  • On 1 March 2020, carried on a business in Australia or was a non‑profit body pursuing its objectives principally in Australia; and
    • before the end of the JobKeeper fortnight, it met the decline in turnover test*:
      • >15% for an ACNC-registered charity (excluding universities, or schools within the meaning of the GST Act – these entities need to meet the basic turnover test)
      • > 50% for large businesses:
        • aggregated turnover for the test period is likely to be $1 billion or more, or aggregated turnover for the previous year to the test period was $1 billion or more (a small business that forms part of a group that is a large business must have a >50% decline in turnover to satisfy the test).
      • ­>30% for all other qualifying entities.
    • And, was not:
      • on 1 March 2020, subject to Major Bank Levy for any quarter ending before this date, a member of a consolidated group and another member of the group had been subject to the levy; or
      • a government body of a particular kind, or a wholly-owned entity of such a body; or
      • at any time in the fortnight, a provisional liquidator or liquidator has been appointed to the business or a trustee in bankruptcy had been appointed to the individual’s property.

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.

*Additional tests apply from 28 September 2020. 

Additional decline in turnover tests

To receive JobKeeper payments from 28 September 2020, businesses will need to meet the basic eligibility tests and an extended decline in turnover test based on actual GST turnover.

  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 of the 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.

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).

 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 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:
    • Was aged 16 years and over; and
    • 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*; and
    • 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; and
    • 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; and
      • Confirming that they have not agreed to be nominated by another employer; and
      • 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 (1 March 2019 to 1 March 2020). These are likely to be employees with a recurring work schedule or a reasonable expectation of ongoing work.

JobKeeper payments

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.

Can I keep getting JobKeeper until September?

If your business and your employees passed the original eligibility tests to access JobKeeper, and you have fulfilled your wage requirements, you can continue to claim JobKeeper up until the last JobKeeper fortnight that ends on 27 September 2020.

ATO assistant commissioner Andrew Watson said in a recent interview, “Once you’re in, you’re in to the end of September. If you meet the eligibility test once, you’re in it for the whole time.” The original eligibility test was a once only test although there are ongoing conditions that need to be satisfied for each JobKeeper fortnight.

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