By Michael Walsh

The Federal Government has extended the JobKeeper Scheme for eligible businesses and self-employed workers for a further six months to March 2021 (previously due to expire 27 September, 2020).

Businesses will need to reassess their eligibility for the JobKeeper 2.0 Scheme, and those eligible will receive a reduced rate of payments for their employees based on two tiers.

JobKeeper 2.0 Scheme’s new rules (from 28 September 28, 2020)

1st extension period – 28 September, 2020 to 3 January, 2021

Employers and business participants will be required to pass an eligibility test based on the business’ actual GST turnover in September 2020. Businesses will no longer be able to estimate turnover. The business must prove a 30% or more decline in turnover when comparing the September 2019 quarter with the September 2020 quarter.

JobKeeper payment rate from 28 September, 2020 to 3 January, 2021

The new scheme also assesses employee eligibility for a tiered pay rate system. From 28 September 2020, eligibility for “full rate” (Tier 1) JobKeeper payments is dependent on the employee having worked 20 hours or more on average over the four weeks of pay periods before 1st March 2020.

There is some discretion to this eligibility criteria. The ATO is allowing those employees who may not have been present during February to apply for an alternative test based on the fact that their hours were not usual during this period.

Please note, the Commissioner is yet to advise how this alternative test will work. For the first period, the payment rates for eligible employees is as below:

  • $1200 per fortnight for all Tier 1 eligible employees/business participants (those who were working an average of 20+ hours per week in the four weeks of pay periods before either 1 March 2020 or 1 July 2020)
  • $750 per fortnight for all other eligible employees/business participants

Note that when applying for the JobKeeper payments, the employer will need to nominate the correct payment rate for each eligible employee.

2nd extension period – 4 January, 2021 to 28 March, 2021 

Businesses will need to reassess their eligibility for the second extension period. The eligibility test for the period 4th January 2021 to 28th March, 2021 will require businesses to demonstrate that their actual GST turnover has fallen by 30% or more in the December 2020 quarter relative to the December 2019 quarter.

JobKeeper payment rate from 4 January, 2021 to 28 March, 2021 

Please note, the JobKeeper payment rates will be reduced during the second extension period and are assessed in the same way as above. Therefore, the rates for the JobKeeper payments during the second period are as follows:

  • $1000 per fortnight for all Tier 1 eligible employees/business participants (those who were working an average of 20+ hours per week in the four weeks of pay periods before either 1 March 2020 or 1 July 2020)
  • $650 per fortnight for all other eligible employees/business participants 

Matters to consider

  • Please note, the figures used when determining whether your business has experienced a 30% decline in turnover must be what is physically reported in your BAS. Therefore, you will be unable to use the accruals method if you report on a cash basis and vice versa.
  • As the decline in turnover will be determined by reference to actual BAS lodged, and the lodgement date will be after a relevant pay fortnight, the ATO holds discretion to extend the time to make payment to employees in order to meet the wage conditions.
  • The JobKeeper Scheme will continue to remain open to new eligible businesses, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.
  • The JobKeeper Scheme will continue to be made by the ATO to employers/business participants in arrears. Wages will still need to be paid to employees equal to, or greater than, the amount of the JobKeeper payment (before-tax) based on the payment rate that applies to each employee.

Please note that JobKeeper 2.0 has just been legislated, however the Commissioner is yet to provide any further information regarding application dates and processes. The legislation also does not provide any commentary regarding alternative tests for proving a business’ decline in turnover.

Please do not make any top-up payments to employees after the 27th of September until further notice, as we will provide advice regarding your situation once further details are released.

If you believe that your business may be eligible to receive JobKeeper 2.0 and you need assistance with the application process, please contact our JobKeeper team at jobkeeper@walshs.com.au or call our offices on 07 3221 5677.