COVID-19 – JobKeeper eligible employee dates

Key changes due to JobKeeper

JobKeeper continues to evolve, as the Government attempts to roll with the punches that the COVID-19 pandemic keeps throwing.  Firstly they announced an extension to the program, called JobKeeper 2.0. Following that was the announcement and formalisation of a change made to the qualification date for eligible employees, which is applicable for the current JobKeeper program happening now.

For JobKeeper 2.0, the key change is that employers now only have to demonstrate a decline in turnover for the quarter of September 2020 against either the quarter of September 2019, or an appropriate substituted period under an alternative test if applicable. There are also two tiers of payments based on hours that employees worked at certain times.

The formal rules and regulations for JobKeeper 2.0 have not been published yet, so the focus here will be on the change of qualification date, from 1 March 2020 to 1 July 2020. The fortnight which the change of date applies from is the one commencing 3 August 2020.

What’s new from 3 August 2020 and who is eligible?

Several categories of employees are now eligible that otherwise would not have been. These are:

New employees engaged between 1 March 2020 and 1 July 2020

Eligible employees who were engaged on a full time or part time basis before 1 July 2020 are now eligible. Previously they would be ineligible if they were not engaged prior to 1 March 2020.

Re-nominating employees – those who have switched employment between 1 March 2020 and 1 July 2020.

An individual must have ceased either employment or being an eligible business participant between 1 March 2020 and 1 July 2020 and must have been employed by the new employer before 1 July 2020.

The distinction with the first category is that under the original rules if someone had previously nominated with an employer or as an eligible business participant, they would not be allowed to nominate with a new employer at a later date.

Re-employing – those that were eligible on 1 March 2020 but since terminated

For an individual that was eligible on 1 March 2020, their eligibility is preserved if they are re-engaged, even if this occurs after 1 July 2020. However, their eligibility is not preserved if they have re-nominated for another entity.

Change in circumstances since 1 March 2020 for ongoing employees

Not all employees engaged at 1 March 2020 were eligible at that time. With the change of eligibility date to 1 July 2020, some employees may become eligible for the first time where:

  • They became a long term casual between 1 March 2020 and 1 July 2020 (and they have not nominated any other employer for JobKeeper entitlement).
  • They have converted to permanent full time or permanent part time employment between 1 March 2020 and 1 July 2020.
  • They have become permanent residents or the holder of Subclass 444 (Special Category) visa by 1 July 2020.
  • They turned aged 16 between 1 March 2020 and 1 July 2020, but keeping in mind that for aged 16 or 17 they need to be living independently or not undertaking full-time study on 1 July 2020.

Eligibility from 1 March 2020 is preserved

There is no need to re-test eligibility for any employees that were receiving JobKeeper support prior to 3 August 2020, even if their circumstances have changed. Provided the other conditions are still met, such as the wage condition, these employees do not lose their eligibility.

Notification requirements

Notification requirements are still in place for both employers and employees. Employers who might have newly eligible employees need to notify all of those employees by 22 August. Then the potentially eligible employees need to submit the appropriate notification form back to the employer confirming whether or not they are eligible.

Nomination forms for the 1 July employees is available from the ATO here.

The ATO have confirmed that it will allow employers until Monday 31 August 2020 to meet the wage condition for, and to enrol, employees who are newly eligible for JobKeeper under the 1 July 2020 eligibility test.

‘One in all in’

The changes apply from the fortnight commencing 3 August 2020. The ‘one in all in’ principle remains; an employer that has some eligible employees based on 1 March and now has other newly eligible employees from 1 July cannot choose to exclude any eligible employees, aside from the exception available to ACNC registered charities and wages 100% funded from Government funding that has been excluded from the test.

Finally, it is also important to point out that there is no change for qualifying employers, meaning that some businesses which have commenced after 1 March 2020 will still not be eligible, even if they have had a recent decline in turnover. There has also been no change made to the wage condition, requiring that all eligible employees are paid the minimum $1,500 per fortnight before tax by the end of each fortnight.

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.

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.
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