COVID-19 – JobKeeper 2.0

Government announcement of JobKeeper 2.0

The Prime Minister and Treasurer announced on Tuesday 21 July changes to the JobKeeper program, describing it as JobKeeper 2.0 and confirming that it will be extended from its original expiry date of 28 September 2020 until 28 March 2021.

There are two important points to make in relation to this extension;

  • There are no changes being implemented to the existing program, so it will run as it has been until 28 September but,
  • Employers will need to re-test their eligibility for the program to receive payments for both the December 2020 and March 2021 quarters.

In addition to the ongoing testing requirements there will be a two tiered payment structure based on how many hours employees were working in February 2020, along with a reduction in payments made to support payroll. The reduction in payments and stricter eligibility is a reflection of the Government stepping back from the idea that the economy will be ‘snapping back’ at any point soon, but that it will work its way out over the second six month period.

The key points as announced are:

Dates

JobKeeper will run as originally intended until 28 September 2020.

JobKeeper 2.0 will run for two separate quarters, firstly from 28 September 2020 until 3 January 2021 and then again from 3 January 2021 until 28 March 2021, provided employers satisfy the testing requirements for those quarters.

Decline in turnover test

The decline in turnover thresholds have not changed for JobKeeper 2.0. These remain as:

  • 50% for those with aggregate turnover of more than $1 billion,
  • 30% for those with aggregate turnover of less than $1 billion,
  • 15% for Australian Charities and Not for Profits Commission registered charities (excluding schools and universities).

To Be Eligible 

  • To be eligible for JobKeeper Payments for the first quarter of JobKeeper 2.0, being 28 September 2020 to 3 January 2021, entities will need to meet a modified decline in turnover test. Entities will need to show that they have met the decline in turnover test in the June and September 2020 quarters, with reference to their actual GST turnover and relative to comparable periods (generally the corresponding quarters in 2019).
  • To be eligible for JobKeeper Payments for the second quarter of JobKeeper 2.0, being 4 January 2021 to 28 March 2021, entities will need to meet a modified decline in turnover test. Entities will need to show that they have met the decline in turnover test in the June, September and December 2020 quarters, with reference to their actual GST turnover and relative to comparable periods (generally the corresponding quarters in 2019).
  • The Jobkeeper Payment will remain open for new recipients that may become eligible in the extended periods.

An employer could be eligible for the December 2020 quarter, but not the March 2021 quarter if their turnover improves sufficiently from the September to December quarter.

Finally, if the business/employer fails the turnover test when re-testing eligibility, this will not affect their eligibility prior to 28 September 2020.

Treasury has provided the following information in relation to testing:

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 (for example, if the entity is a member of a GST group).

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 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 Commissioner of Taxation will have discretion to extend the time an entity has to pay employees in order to meet the wage condition, so that entities have time to first confirm their eligibility for the JobKeeper Payment.

Two tiered payments

For the first quarter of JobKeeper 2.0, payments will be as follows:

  • $1,200 per fortnight for eligible employees and business participants that, in the four weeks prior to 1 March 2020, were working in the business for 20 hours or more per week on average
  • $750 per fortnight for eligible employees and business participants that, in the four weeks prior to 1 March 2020, were working in the business for less than 20 hours per week on average

For the second quarter of JobKeeper 2.0, payments will be as follows:

  • $1,000 per fortnight for eligible employees and business participants that, in the four weeks prior to 1 March 2020, were working in the business for 20 hours or more per week on average.
  • $650 per fortnight for eligible employees and business participants that, in the four weeks prior to 1 March 2020, were working in the business for less than 20 hours per week on average.

The Commissioner of Taxation will be able to provide tests for working out employees hours in unusual circumstances, along with alternative tests for turnover, where it is not appropriate to compare actual turnover in a 2020 quarter with actual turnover in a 2019 quarter.

Treasury has updated their website here.

Please contact your Accru Melbourne representative on (03) 9835 8200 if you have any queries about the points above or to find out more about JobKeeper 2.0.
About the Author
Daniel Arnephy
Daniel is our technical expert for all your taxation needs. His diverse network and client base allows him to continuously build his knowledge and analyse every situation he is faced with an experienced outlook.
Start Your Journey
Buying a house? Need business advice? Want to know where to invest your money? Or does your business need an audit? We want to give you every possible chance to grow your wealth, better your health and be proud of yourself!