Aug 1, 2020

Get ready for changes to the JobKeeper

UPDATED AS OF 7 August 2020

Businesses nervous about the state of the economy in the wake of a potential second wave can breathe a sigh of relief; the government has confirmed its intention extend the JobKeeper beyond the current legislated end date of 27 September with a few tweaks to eligibility and payment rates.

While the government has extended the JobKeeper from 28 September 2020 to 28 March 2021, not everyone currently on the JobKeeper will be treated the same. Part of the changes include the introduction of a part-time rate to “better align the payment with the incomes of employees before the onset of the COVID-19 pandemic”.

The rates per fortnight for the following periods are: 28 September 2020 to 3 January 2021: full rate – $1,200; less than 20hrs worked (part-time rate) – $750. 4 January 2021 to 28 March 2021: full rate – $1,000; less than 20hrs worked (part-time rate) – $650. Employees who were employed for less than 20 hours a week on average in the four weekly pay periods ending before 1 March 2020 will receive the part-time rate from 28 September 2020.

Businesses will therefore be required to nominate which payment rate they are claiming for each of their eligible employees. Payment by the ATO will continue to be made in arrears, and alternative tests are available where the employees’ hours were not usual during the February 2020 reference period.

In addition to the change in payment rates, businesses that want to continue claiming the JobKeeper payment beyond 27 September 2020 will be required to reassess their eligibility with reference to their actual turnover in the June and September quarters as well as satisfying existing eligibility requirements. To be eligible for the JobKeeper for the period 28 September 2020 to 3 January 2021, businesses will be need to demonstrate that their actual GST turnover has significantly fallen in the September quarter 2020 (July, August, September) relative to comparable periods (generally the corresponding quarters in 2019). Note this requirement was recently amended in light of the stage 4 lockdowns in Victoria where businesses only need to satisfy the decline in turnover in September 20 20 quarter and not the June 2020 quarter and September 2020 quarter. Note this applies to all businesses across Australia and is not limited to Victorian businesses.

Similarly, to be eligible for the second JobKeeper extension from 4 January to 28 March 2021, businesses will again need to demonstrate that their actual GST turnover has significantly fallen in the September 2020 quarter and the December 2020 quarter relative to comparable periods (generally the corresponding quarters in 2019). A 30% decline is considered significant (in line with existing eligibility requirements) for most businesses not including not-for-profits.

A further change has been announced to move the reference date for assessing eligible employees. The previous JobKeeper included employees who were employed as at 1 March 2020, this date for JobKeeper 2.0 has been changed to 1 July 2020, which may mean previous employees who were not included as they didn’t satisfy the 12 month test for casual employees may not be included or permanant employees hired since 1 March 2020 are now eligible for JobKeeper.  Should any businesses be eligible for JobKeeper 2.0, it would advisable to revisit the eligible employees as this may now include a greater of employees.

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, businesses will need to assess their eligibility for JobKeeper in advance of the BAS deadline in order to meet the wage condition (which requires them to pay their eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO).

Contact one of our accountants in North Sydney for further information on the changes to JobKeeper to determine if your business is impacted.