Jobkeeper 2.0. What changes after 28 September.

Between April to May 2020, JobKeeper was taken up by 920,000 organisations and around 3.5 million individuals. This equals approx. 30% of the Australian private sector.

On 21 July 2020, the Government announced an extension of the JobKeeper program to 28 March 2021, but with tighter access and reduced rates. From 28 September 2020, employers seeking to continue claiming JobKeeper payments will need to reassess their eligibility and prove a decline in turnover.

If your business currently receives JobKeeper, your situation will generally remain unchanged until 27 September 2020.

Eligibility

To continue receiving JobKeeper payments, employers will need to reassess their eligibility with reference to actual GST turnover (not projected) for the June 2020 quarter and September 2020 quarter (for payments between 28 September 2020 to 3 January 2021) and again for the December 2020 quarter (for payments between 4 January 2021 to 28 March 2021).

Eligible Employers

The basic tests for JobKeeper remain the same with an extended decline in turnover test.

Original employer 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% reduction in turnover for an ACNC-registered charity;
    • 50% reduction in turnover for businesses with turnover greater than $1 billion per year; or
    • 30% reduction in turnover for all other businesses.
  • And, was not:
    • Subject to a Major Bank Levy;
    • A government body; or
    • In the process of liquidation.

1 March 2020 is the key 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 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.  

* 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 2020 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

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.

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.  

For further information and assistance in understanding the impact of the changes to your business. Please contact us today.