"Second Time Period" - JobKeeper 2.0 Extension Period rules applying from 28 September 2020 to 3 January 2021
Eligible Employer Rules – the Decline in turnover test
To continue receiving JobKeeper payments between 28 September 2020 and 3 January 2021, employers will need to re-assess their eligibility and will need to demonstrate a significant decline in actual GST turnover during the September 2020 quarter (compared to the September 2019 quarter).
Importantly, these latest announcements have removed the requirement to also satisfy the significant decline in turnover during the June 2020 quarter (compared to the June 2019 quarter).
Eligible Employee – Test date extended to 1 July 2020
These latest announcements have changed the testing date for when an employee was employed by the business and this date will move from 1 March 2020 to 1 July 2020.
Therefore, when a business is considering whether it is eligible for JobKeeper 2.0 after 28 September, this new (1 July 2020) testing date will be relevant when considering the following criteria for Eligible Employees test where the employee(s):
- 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).
Employees will continue to receive the JobKeeper Payment through their employer during the extension period if they and their employer are eligible and their employer is claiming the JobKeeper Payment. However, the amount of the JobKeeper Payment will change at the reduced payment rates detailed below.
Payment Rates Reduced
The value of the JobKeeper Payment amount will change from 28 September 2020 to 3 January 2021, and two different amounts will be based on the average weekly hours worked by Eligible Employees (and business participants) during the month of February 2020.
The JobKeeper Payment amount for the seven fortnights during the "Second Time Period" will be reduced as follows:
- $1,200 per fortnight per employee or business participant who worked > 20 hours per week ("the higher rate"); and
- $750 per fortnight per employee or business participant working < 20 hours per week ("the lower rate").
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 "20 hours or more per week on average"?
The ATO has been given discretion to set out alternative tests for circumstances where an employee's (or business participant's) hours were unusual during February 2020.
We understand the ATO will be providing guidance on how the "20 hours or more per week on average" requirement will be interpreted (or tested), in particular, for new employees who started working with the business after the end of February but before 1 July 2020. Also, the ATO is expected to provide some clarification of how the average hours will be interpreted when pay periods are not completed on a weekly basis.
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 relevant payment rate detailed above (ie. the wage condition).