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JobKeeper Payment Scheme now extended until 28 March 2021

[Please note that two important changes were announced on 7 August 2020 to relax and expand these rules, and these have been explained in our Tax Alert (click here) released on 10 August 2020]

Yesterday (21 July 2020), the Federal Government announced an extension of the JobKeeper Payment scheme for a further six months to 28 March 2021, and is now being referred to as JobKeeper 2.0.

 

The extended JobKeeper package includes tighter access for participants and reduced payment amounts.  From 28 September 2020, any Employers seeking to claim JobKeeper payments will need to re-assess their eligibility and prove an actual decline in turnover.

 

If your business is currently participating in the JobKeeper Payment scheme, your arrangements will generally remain unchanged until 27 September 2020.

 

We have provided an outline of the key details for Employers on JobKeeper 2.0 below.


Eligible Employer rules

To continue receiving JobKeeper payments after 28 September 2020, Employers will need to re-assess their eligibility with reference to "actual GST turnover":

  • for the June 2020 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.

The Eligible Employer test (as explained in a previous Tax Alert), used to determine which businesses can access the JobKeeper Payment scheme remain the same, with an additional decline in turnover test (explained next).


Additional decline in turnover tests

To receive JobKeeper payments after 28 September 2020, businesses will need to meet the current eligibility tests and a new "additional decline in turnover test" applied at different testing times, based on "actual GST turnover".

 

It is important to note here that the additional decline in turnover tests will need to use "actual GST turnover" figures, and will no longer be able to use projected GST turnover figures.

Period

What "decline in turnover test" is applied?

 

30 March to 27 September 2020

 

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 – known as "the basic test".

Alternative tests can potentially be applied where a business can not satisfy "the basic test" and does not have a relevant comparison period.

 

28 September to 3 January 2021

 

[Please note these tests were changed on 7 August 2020, and have been updated here].

Actual GST turnover in the September 2020 quarter fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the September 2019 quarter.

 

4 January 2021 to 28 March 2021

 

[Please note these tests were changed on 7 August 2020 and have been updated here].

Actual GST turnover in the December 2020 quarter fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the December 2019 quarter.

 

We note that most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility.  However, as BAS deadlines are generally not due until the month after the end of the quarter, testing the eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees.

 

While the JobKeeper Payment will continue to be made by the ATO to employers in arrears, employers will continue to be required to make wage payments to employees at least equal to the JobKeeper payment (before tax), based on the payment rate that applies to each employee (ie. the wage condition).

 

We are also aware that different arrangements are expected to be released for businesses and not-for-profits (NFPs) which are not required to lodge a BAS.


Eligible Employees (and Business Participants) rules

The current test to determine Eligibility Employees (and Business Participants) will broadly remain the same (as explained in a previous Tax Alert), but the value of the JobKeeper Payment amount will change from 28 September 2020, and new amounts will be based on the average weekly hours worked by Eligible Employees back in February 2020.

Period

What is the JobKeeper Payment amount?

30 March to 27 September 2020

  • $1,500 per fortnight per employee

28 September to 3 January 2021

 

  • $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

4 January 2021 to 28 March 2021

 

  • $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

This significant change to the JobKeeper Payment amounts after 28 September 2020 now raises a critical question; how do we assess whether 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 ATO has been given discretion to set out alternative tests for circumstances where an employee's (or business participant's) hours were not usual during February 2020.  Furthermore, the ATO will provide guidance on how this will be dealt with when pay periods are not completed on a weekly basis.

At this time, we understand that there will be a requirement to nominate which payment rate will be claimed for each employee/business participant (based on hours worked before 1 March 2020). 


Do you keep getting the JobKeeper Payment from now until September?

If your business entity and your employees passed the original eligibility tests (released in March 2020) to access the JobKeeper Payment scheme, and you have fulfilled your "wage payment" requirements, you can continue to claim JobKeeper up until the last JobKeeper fortnight which ends on 27 September 2020.

 

The original JobKeeper eligibility test was a "once only test", although there are ongoing conditions that need to be satisfied for each JobKeeper fortnight (ie. making wage payments to eligible employees of at least $1,500 per fortnight).


Can businesses not currently accessing the JobKeeper Payment scheme still enter?

The JobKeeper Payment scheme will remain open to new recipients (who are not currently enrolled in the scheme), provided they meet the existing eligibility requirements and the additional turnover tests (explained above) during the extension period up to 28 March 2021.


Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.