JobKeeper 2.0 – Changes to the JobKeeper Payment

JobKeeper Extended

The Federal Government has announced that the JobKeeper scheme will be extended to 28 March 2021.  It was previously scheduled to end on 27 September 2020.  There will be changes to both the eligibility requirements and payment amounts.

  • The fortnightly payment of $1,500 will be reduced to $1,200 from 28 September 2020 and $1,000 from 4 January 2021.
  • A new two-tiered payment structure will be introduced from 28 September 2020, which will reduce the payment rates for employees who worked fewer than 20 hours per week in February 2020.

The eligibility rules for employees remain unchanged.  Particularly noting that the employees must have been employed as full-time, part-time or long-term casual (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020.

Changes to JobKeeper Eligibility Requirements

Businesses will be required to reassess their eligibility based on actual GST turnover, rather than projected GST turnover:

  • To be eligible from 28 September 2020 to 3 January 2021, businesses must have met the decline in turnover test for both the June and September 2020 quarters; and
  • To remain eligible from 4 January 2021 to 28 March 2021, businesses must have met the decline in turnover test for each of the June, September and December 2020 quarters.

The decline in turnover tests remain unchanged from the existing rules:

  • Businesses with an aggregated turnover of less than $1 billion that experience a decrease in turnover of more than 30 per cent relative to a comparable period a year ago (generally the corresponding quarters in 2019).
  • Businesses with an aggregated turnover of $1 billion or more that experience a decrease in turnover of more than 50 per cent relative to a comparable period a year ago (generally the corresponding quarters in 2019).
  • Not-for-profit entities (including charities) that experience a decrease in turnover of more than 15 per cent relative to a comparable period a year ago (generally the corresponding quarters in 2019).

Similar to the Commissioner’s existing discretion, there will be alternative tests for businesses where it is not appropriate to compare to 2019 figures.

The JobKeeper scheme will continue to be available to new recipients, however they must meet the existing eligibility requirements and additional turnover tests.

Eligibility for JobKeeper must be assessed in advance of BAS deadlines to ensure businesses pay their eligible employees the required amounts (“wage condition”) in order to receive the JobKeeper payment from the ATO.

Changes to the JobKeeper Payment Rate

From 28 September 2020 to 3 January 2021, people who worked at least 20 hours a week on average will receive a flat rate of $1,200 a fortnight.  Those who work less will receive a flat rate of $750 per fortnight.

From 4 January 2021 to 28 March 2021, people who worked at least 20 hours a week on average will receive $1,000 a fortnight.  Those who work less will receive $650 per fortnight.

  • The test is based on hours worked for the month of February 2020 (or hours actively engaged in the business for eligible business participants),
  • The Commissioner will have discretion to set out alternative tests where hours were not usual during February 2020 e.g. employee on leave or not employed for all of February 2020; and
  • Businesses will be required to nominate which payment rate they are claiming for each of their employees/business participants.

Employers will continue to be required to make payments to employees (before tax), equal to or greater than the payment rate that applies to each employee (“wage condition”).

 

More information:

The Government is moving quickly and things are changing daily with regards to the response to COVID-19.  The ATO is posting regular updates at this website.

Should you have any questions regarding this stimulus measure or any other Government measure announced in relation to COVID-19, please do not hesitate to contact our office for more information.

 

Disclaimer

The information provided in this article does not constitute advice.  The information is of a general nature only and does not take into account your individual situation.  It should not be used, relied upon, or treated as a substitute for specific professional advice.  We recommend that you contact Brentnalls WA before making any decision to discuss your particular requirements or circumstances.