JOBKEEPER EXTENSION
On 21 July 2020, the Federal Government announced that due to the ongoing COVID-19 pandemic, the JobKeeper Payment scheme will be extended by six months until 28 March 2021, from the original end date of 27 September 2020. This will extent the scheme for an additional 13 fortnights — i.e. the extension doubles the length of the original scheme:
a two-tier payment rate will apply based on the worker’s average weekly work hours during a reference period;
the current $1,500 per fortnight payment rate will be reduced on 28 September 2020 and reduced further on 4 January 2021;
the decline in turnover will be retested on a quarterly basis; and
the decline in turnover test will be based on actual GST turnover.
On 7 August 2020, the Federal Government announced additional changes to increase the possibility of accessing the scheme during the extended period (i.e. 28 September 2020 to 28 March 2021), driven by the ongoing crisis and the implementation of Stage 4 business restrictions in Victoria. From 28 September 2020, entities will only have to meet the quarterly decline in turnover test for the previous quarter instead of multiple quarters which was originally planned.
As of the 3 August 2020, the employee eligibility test date will change from 1 March 2020 to 1 July 2020. Staff that were hired after 1st March 2020 may also eligible under the new rules.
The proposed changes to the JobKeeper scheme
The proposed amendments to JobKeeper are outlined below. Other parts of the current scheme will remain the same for the extended scheme.
Current scheme
An individual is an eligible employee of their employer for a fortnight where they satisfy the following requirements:
The individual is employed by the entity at any time in the fortnight — including those stood down or re-hired;
on 1 March 2020 — the individual was aged 18 or over (or if they were 16 or 17 years old on 1 March 2020 — they were independent or not undertaking full-time study);
on 1 March 2020 — the individual was either a full-time, part-time or fixed-term permanent employee, or a long-term casual employee;
on 1 March 2020 — the individual was either an Australian resident for social security law purposes, or a tax resident and held a special category Subclass 444 visa;
the individual agrees to be nominated by the employer as an eligible employee; and
the individual does not receive the Government’s paid parental leave or dad and partner pay, or workers’ compensation payments for total incapacity for work, at any time during the fortnight.
Eligibility as of 3 August 2020
The eligibility criteria for employees (and business participants) will change from Monday 3 August 2020. For the last four fortnights of the current scheme, and during the course of the extended scheme, the reference date for employee will change from 1 March 2020 to 1 July 2020.
The individual is employed by the entity at any time in the fortnight — including those stood down or re-hired;
on 1 July 2020 — the individual was aged 18 or over (or if they were if 16 or 17 years old on 1 March 2020 — they were independent or not undertaking full-time study);
on 1 July 2020 — the individual was either a full-time, part-time or fixed-term permanent employee, or a long-term casual employee;
on 1 July 2020 — the individual was either an Australian resident for social security law purposes, or a tax resident and held a special category Subclass 444 visa
the individual agrees to be nominated by the employer as an eligible employee; and
the individual does not receive the Government’s paid parental leave or dad and partner pay, or workers’ compensation payments for total incapacity for work, at any time during the fortnight.
Payment rates
Current scheme
The payment rate is $1,500 per fortnight, this is a flat rate regardless of the employee’s work hours for the relevant fortnight.
Extended scheme
The payment rate will be reduced in two tranches as follows:
Categories of employees — hours worked during reference period
Current scheme
There is no distinction between full-time, part-time, fixed term, casual or stood down employees for the purposes of the minimum payment. Every eligible employee is entitled to the minimum payment of $1,500 per fortnight regardless of the number of hours worked in a fortnight.
An employee must have been employed (other than as a casual, excluding a long-term casual) by the business on 1 March 2020.
A business participant must have been actively engaged in the business on 1 March 2020.
Extended scheme
The two-tier payment system will apply to workers based on their average weekly work hours in the relevant reference period.
The reference period is the four weeks of pay periods before either 1 March 2020 or 1 July 2020.
The payment criteria is as follows:
Eligibility criterion — decline in turnover test
Extended scheme
The proposed new decline in turnover test will operate as follows:
Accessing decline in turnover based on activity statements
The deadline to lodge the September BAS is in late October, and the December BAS is in late January (monthly) or late February (quarterly). It’s important for businesses to assess their JobKeeper eligibility in advance of the BAS deadline in order to meet the wage condition.
If you wish to discuss this further don’t hesitate to contact one of our team. Laz
Reference – Tax Banter