(updated 21st Sep 2020)
JobKeeper 1.0 ends on 27 September 2020. Those needing further support will need to reassess their eligibility and prove an actual decline in turnover to be eligible to enter JobKeeper Extension 2.0.
To receive JobKeeper from 28 September 2020, eligible employers need to assess their decline in turnover with reference to their actual GST turnover for the;
- September 2020 quarter (for payments between 28 Sep to 3 Jan 2021), and again for the
- December 2020 quarter (for payments between 4 Jan 2021 to 28 Mar 2021)
From 28 September 2020, the JobKeeper payment rate will reduce and split into a higher and lower rate based on the number of hours the employee worked in a specific 28 day period prior to 1 March 2020 or 1 July 2020.
From 28 September 2020, the eligibility tests to access JobKeeper for employers will change, as will the amount of the JobKeeper payment for employees and business participants. To receive JobKeeper from 4 January 2021, employers will need to assess their eligibility again.
Is it worth noting that eligibility for one JobKeeper period does not entitle you to, or exclude you from, payments in another period. Each eligibility period is addressed separately. That is, there might be businesses that qualified for the first tranche of JobKeeper, don’t qualify for the second tranche but qualify for the third.
The decline in turnover test
|30 Mar to 27 Sep 2020
|28 Sep to 3 Jan 2021
|4 Jan 2021 to 28 Mar 2021
|Decline in turnover test||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.*||Actual GST turnover in the Sep 2020 quarter (Jul, Aug & Sep) fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.*||Actual GST turnover in the Dec 2020 quarter (Oct, Nov & Dec) fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.*|
How do I calculate my GST Turnover?
- Calculating GST turnover for extension part 2 & 3 is different to the original JobKeeper requirements
- Entities will only be using current GST turnover figures (not projected GST turnover)
- When applying the new turnover reduction tests for the Sep 2020 quarter and Dec 2020 quarter, entities that are registered for GST must use the same method that is used for GST reporting purposes. That is, if the entity is registered for GST on a cash basis then a cash basis must be used to calculate current GST turnover for the purpose of these new tests.
- Entities that are not registered for GST must use the method they ordinarily calculate their income for tax purposes.
- Current GST turnover includes proceeds from the sale of capital assets, unless the sale is input taxed.
- Current GST turnover includes taxable and GST-free supplies, but should exclude input taxed supplies such as residential rental income and financial supplies like dividends, interest etc.
- JobKeeper and ATO cash flow boost payments should be excluded from the calculation along with other payments that don’t represent consideration for a supply made by the entity such as certain State based grants.
What are the Jobkeeper Payments?
From 28 September 2020, the payment rate for JobKeeper will taper from the flat rate of $1,500 and split into a higher and lower rate.
|JobKeeper payment||30 Mar to 27 Sept 2020
|28 Sep to 3 Jan 2021
|4 Jan 2021 to 28 Mar 2021
|Worked 80 hours or more in the reference period||· $1,500 per fortnight per employee||· $1,200 per fortnight per employee or business participant||· $1,000 per fortnight per employee or business participant|
|Worked less than 80 hours in the reference period||· $750 per fortnight per employee or business participant||· $650 per fortnight per employee or business participant|
What is the reference period I use?
|Eligible employees||The 28 days finishing on the last day of the last pay period that ended before either:
· 1 March 2020, or
· 1 July 2020.
|Actual hours worked including any hours for which they received paid leave (e.g., annual, long service, sick, carers and other forms of paid leave) or paid absence for public holidays. An employee’s ‘actual’ hours might be different to their contracted, ordinary hours or hours they are paid for.|
|Eligible business participants||February 2020 (29 days)||Active engagement in the business.|
|Religious practitioners||February 2020 (29 days)||Activities in pursuit of your vocation for your institution.|
Business Participants and Sole Traders
The reference period that a business participant must use is the month of February 2020 (the whole 29 days).
A business participant is;
- a sole trader or self-employed with an ABN
- one partner in a partnership
- adult beneficiary of a trust
- director or shareholder who works in the business
only one person in a partnership, one beneficiary of a trust, or one director / shareholder can be eligible for JobKeeper payments for a particular entity).
The test to determine eligibility is based on the hours of active engagement in the business carried on by the entity. This requires an assessment of the hours that the business participant was actively operating the business or undertaking specific tasks in business development and planning, regulatory compliance or similar activities in an applicable reference period.
Other than sole traders, a business participant must provide a declaration to the business entity confirming their hours worked over the reference period.
For JobKeeper payments from 28 September 2020, the business must notify the Tax Commissioner about whether the higher or lower rate applies to the business participant and notify the participant within 7 days of providing this notice to the Commissioner.
Where February 2020 was not typical of the participant’s hours, an alternative test can be used
Need our Help?
If you would like our assistance assessing the criteria, eligibility or applying for the JobKeeper Extension, please contact our office to receive an engagement and fees proposal.
The future of JobKeeper
Between April to May 2020, JobKeeper was taken up by 920,000 organisations and around 3.5 million individuals – 30% of pre-Coronavirus private sector employment.
On 21 July 2020, the Government announced an extension of the JobKeeper program to 28 March 2021 but with tighter access and reduced rates. From 28 September 2020, employers seeking to claim JobKeeper payments will need to reassess their eligibility and prove an actual decline in turnover.
If your business currently receives JobKeeper, your arrangements will generally remain unchanged until 27 September 2020.
We’ve summarised the key details for employers on JobKeeper 2.0 below.
The second tranche of the JobKeeper scheme changes the eligibility test for employers and the method and amount paid to employees.
To continue receiving JobKeeper payments, employers will need to reassess their eligibility with reference to actual GST turnover for the June 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 broad eligibility tests to access JobKeeper remain the same with an extended decline in turnover test.
- On 1 March 2020, carried on a business in Australia or was a non‑profit body pursuing its objectives principally in Australia; and
- before the end of the JobKeeper fortnight, it met the decline in turnover test*:
- >15% for an ACNC-registered charity (excluding universities, or schools within the meaning of the GST Act – these entities need to meet the basic turnover test)
- > 50% for large businesses:
- aggregated turnover for the test period is likely to be $1 billion or more, or aggregated turnover for the previous year to the test period was $1 billion or more (a small business that forms part of a group that is a large business must have a >50% decline in turnover to satisfy the test).
- >30% for all other qualifying entities.
- And, was not:
- on 1 March 2020, subject to Major Bank Levy for any quarter ending before this date, a member of a consolidated group and another member of the group had been subject to the levy; or
- a government body of a particular kind, or a wholly-owned entity of such a body; or
- at any time in the fortnight, a provisional liquidator or liquidator has been appointed to the business or a trustee in bankruptcy had been appointed to the individual’s property.
- before the end of the JobKeeper fortnight, it met the decline in turnover test*:
1 March 2020 is an absolute date. An employer that had ceased trading, commenced after 1 March 2020, or was not pursuing its objectives in Australia at that date, is not eligible.
*Additional tests apply from 28 September 2020.
Additional decline in turnover tests
To receive JobKeeper payments from 28 September 2020, businesses will need to meet the basic eligibility tests and an extended decline in turnover test based on actual GST turnover.
|30 March to 27 September 2020||28 September to 3 January 2021||4 January 2021 to 28 March 2021|
|Decline in turnover||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.*||Actual GST turnover in the June and September 2020 quarters fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same periods in 2019.
The decline for both of the quarters needs to be met to continue receiving JobKeeper payments.
|Actual GST turnover in the June, September and December 2020 quarters fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same periods in 2019. The decline for all three of the quarters needs to be met to continue receiving JobKeeper payments.
* Alternative tests potentially apply where a business fails the basic test and does not have a relevant comparison period.
Most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility. However, as the BAS deadlines are generally not due until the month after the end of the quarter, eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees. However, the ATO will have discretion to extend the time an entity has to pay employees in order to meet the wage condition.
Alternative arrangements are expected to be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group).
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.
Employee eligibility will remain broadly the same but the value of the payment will change from 28 September based on average weekly hours in February 2020.
- On 1 March 2020:
- Was aged 16 years and over; and
- If the individual was aged 16 or 17, was either financially independent or was not undertaking full-time study;
- Was an employee other than a casual, or was a long-term casual*; and
- Was an Australian resident (under the meaning of the Social Security Act 1991), or a resident for tax purposes and held a Subclass 444 (Special category) visa**.
- And, at any point during the JobKeeper fortnight:
- Was an employee of the employer; and
- Was not an excluded employee:
- An employee receiving parental leave pay or dad and partner pay; or
- An employee receiving workers compensation payments in relation to total incapacity.
- And, has provided the JobKeeper Payment Employee Nomination to the employer:
- Agreeing to be nominated by the employer as an eligible employee under the JobKeeper scheme; and
- Confirming that they have not agreed to be nominated by another employer; and
- If they are a long-term casual, they do not have permanent employment with another employer.
*A ‘long term casual employee’ is a person who has been employed by the business on a regular and systematic basis during the period of 12 months that ended on 1 March 2020 (1 March 2019 to 1 March 2020). These are likely to be employees with a recurring work schedule or a reasonable expectation of ongoing work.
|JobKeeper||30 March to 27 September 2020||28 September to 3 January 2021||4 January 2021 to 28 March 2021|
|Payment||· $1,500 per fortnight per employee||· $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
|· $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
Assessing if 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 Commissioner of Taxation will have discretion to set out alternative tests for those situations where an employee’s or business participant’s hours were not usual during February 2020. Also, the ATO will provide guidance on how this will be dealt with when pay periods are not weekly.
Can I keep getting JobKeeper until September?
If your business and your employees passed the original eligibility tests to access JobKeeper, and you have fulfilled your wage requirements, you can continue to claim JobKeeper up until the last JobKeeper fortnight that ends on 27 September 2020.
ATO assistant commissioner Andrew Watson said in a recent interview, “Once you’re in, you’re in to the end of September. If you meet the eligibility test once, you’re in it for the whole time.” The original eligibility test was a once only test although there are ongoing conditions that need to be satisfied for each JobKeeper fortnight.
JobSeeker and other support
The Coronavirus supplement will continue, albeit on a reduced rate of $250 per fortnight (from $550), from 25 September until 31 December 2020 for eligible individuals.
|27 April to 24 September 2020||$550 per fortnight|
|25 September to 31 December 2020||$250 per fortnight|
Eligibility remains the same. That is, those receiving:
- JobSeeker Payment (and all payments transitioning as a result of JobSeeker Payment)
- Youth Allowance
- Parenting Payment (Partnered and Single)
- ABSTUDY Living Allowance
- Farm Household Allowance
- Special Benefit
- Eligible New Enterprise Incentive Scheme participants
- Department of Veterans’ Affairs Education Schemes
The eligibility criteria and some of the tests for access to income support is changing.
Eligibility and access
The expanded eligibility criteria for the Jobseeker Payment and the Youth Allowance Jobseeker will continue to apply until 31 December 2020:
- Permanent employees who have been stood down or lost their jobs (and are not receiving payments from an employer or through insurance),
- Sole traders, the self-employed, casuals or contractors who meet the income and assets tests.
In addition, if you receive JobSeeker or Youth Allowance payments, the amount you can earn before impacting income support has been increased to $300 per fortnight from 25 September 2020 until 31 December 2020.
However, a number of restrictions have been reintroduced.
Reintroduction of assets and partner income tests
From 25 September 2020, the assets test and the Liquid Assets Waiting Period (applies to those with assets such as cash savings worth over $5,500 for singles or $11,000 for singles with children and partnered people) will be reintroduced for access to income support payments.
In addition, partner income testing will resume from 25 September, albeit with higher thresholds than those pre coronavirus. That is, you will not be eligible for income support if you are not earning an income but your partner earns $3,086.11 per fortnight or $80,238.89 per annum. The partner income test taper rate will increase from 25 cents for every dollar of partner income earned over $996 per fortnight to 27 cents for every dollar of partner income earned over $1,165 per fortnight.
Reintroduction of job seeking requirements
Job seeking requirements that were suspended from 24 March 2020 have been introduced from 9 June 2020. The mutual obligation requirements include:
- Voluntary job searches
- At least one phone or online appointment with a jobseeker’s employment services provider
- Voluntary participation in activities, either online or in person, and
- No payment suspensions or penalties for failure to comply.
Waiting periods continue to be waived
Some waiting periods for access to income support will continue to be waived until 31 December 2020:
- The one-week ordinary waiting period is waived.
- The newly arrived resident’s waiting period for new migrants (previously four years). Claimants will still need to meet residency requirements, that is they will need to hold a permanent visa. Affected claimants will need to serve the remainder of this waiting period at the end of the period the Coronavirus Supplement is paid for.
- The Seasonal Work Preclusion Period for those who are eligible for the Coronavirus supplement -this applies to those who finished seasonal, contract or intermittent work in the six months prior to claiming income support.