Important Updates for JobKeeper V2 - Further changes

Please consider this article as general guide only and not specific to your individual circumstances.

On 3 and 7 of August the Government announced further changes to the proposed JobKeeper Rules for businesses wanting to claim JobKeeper payments after 27 September 2020.

All businesses wanting to claim JobKeeper payments from 28 September 2020 will need to reassess their eligibility again and prove that their turnover has declined based on actual figures.

Some businesses that did not qualify for the original JobKeeper payments may find that they now qualify for the new JobKeeper payments.

This article is to update you on further changes that were announced on 3 and 7 August 2020 for JobKeeper V2.

UP UNTIL 27 SEPTEMBER 2020

Nothing changes. If your business and your employees have passed the original eligibility tests for JobKeeper and you have paid the required wages amounts each JobKeeper fortnight, then you can continue to claim JobKeeper up until 27 September 2020.

28 SEPTEMBER 2020 TO 3 JANUARY 2021

Business Eligibility

All businesses wanting to receive JobKeeper will need to reassess their eligibility. You will need to demonstrate that your ACTUAL GST turnover (as reported on your Business Activity Statement) for the September 2020 quarter has decreased by the relevant amount when compared to the corresponding September 2019 quarter.

The decline in turnover test remains the same as the existing rules, being:
  • Entities with turnover greater than $1 billion – 50%.
  • Entities with turnover less than $1 billion – 30%.
  • ACNC registered charities (excluding schools and universities) – 15%.
Payment Rates

The payment rate will be:

  • $1,200 per fortnight for eligible employees who were working in the business or not-for-profit for 20 hours or more a 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; and
  • $750 per fortnight for other eligible employees and business participants.

This means that:

  • For employees eligible at 1 March 2020, the payment rate will be based on hours worked in February 2020 or June 2020 (whichever has the higher number of hours worked);
  • For employees eligible at 1 July 2020, the payment rate will be based on hours worked in June 2020.

4 JANUARY 2021 TO 28 MARCH 2021

Business Eligibility

All businesses wanting to receive JobKeeper will need to again reassess their eligibility. You will need to demonstrate that your ACTUAL GST turnover (as reported on your Business Activity Statement) for the December 2020 quarter has decreased by the relevant amount when compared to the corresponding December 2019 quarter.

Payment Rates

The payment rate will be:

  • $1,000 per fortnight for eligible employees who were working in the business or not-for-profit for 20 hours or more a 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; and
  • $650 per fortnight for other eligible employees and eligible business participants.

This means that:

  • For employees eligible at 1 March 2020, the payment rate will be based on hours worked in February 2020 or June 2020 (whichever has the higher number of hours worked);
  • For employees eligible at 1 July 2020, the payment rate will be based on hours worked in June 2020.
EMPLOYEE ELIGIBILITY

The employee eligibility requirements have changed and all criteria listed below must be met in order for an employee to be eligible.

The employee:

  • is currently employed by an eligible employer;
  • was employed by an eligible employer at 1 July 2020;
  • was full-time, part-time, fixed-term at 1 July 2020 or a long term casual (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);
  • was at least 18 years of age at 1 July 2020 or aged 16 to 17 years and independent or not undertaking full time study;
  • was an Australian resident as at 1 July 2020;
  • was not in receipt of a JobKeeper payment from another employer;
  • was not in receipt of government parental leave pay; and
  • was not in receipt of a payment in accordance with Australian worker compensation law for an individual's total incapacity for work.
BUSINESS PARTICIPATION ENTITLEMENT

Sole traders and some other entities (such as partnerships, trusts or companies) may be entitled to the JobKeeper Payment scheme under the business participation entitlement. A limit applies of one JobKeeper payment per fortnight for one eligible business participant. Sole traders, one partner in a partnership, one beneficiary of a trust, and one director or shareholder of a company may be regarded as an eligible business participant.

ALTERNATIVE TESTS

Businesses and not-for-profits will generally be able to assess eligibility based on details reported in the Business Activity Statement (BAS). Alternative arrangements will be put in place for businesses and not-for-profits that are not required to lodge a BAS.

The Commissioner of Taxation will have discretion to set out alternative tests where an employee or business participant’s hours were not usual during the February and/or June 2020 reference period (the period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility). For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February or June 2020.

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.

NEXT STEPS

Businesses and not-for-profits 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).

The ATO will release their specific requirements over the next month.

We will keep you informed once we receive updates.

In the meantime, please feel free to contact us if you have any questions about this article or about JobKeeper V2.