JobKeeper officially extended
As of August 7 2021, the Australian Federal Government has officially extended its JobKeeper Payment scheme by a further six months to 28 March 2021. JobKeeper support will be aimed at helping businesses and not-for-profit organisations that are substantially impacted by COVID-19. It is important to note that the payment rate will be reduced and a lower payment rate will be introduced for those who work less hours.
Below, we provide a summary of those changes, and what they mean for businesses, not for profits, and employees. If you would like a full summary of the changes, click the button below to download a full copy of the Treasury fact sheet, or visit the Treasury website for more information.
Changes to JobKeeper
The JobKeeper payment, which was due to end on 27 September 2020, will be available for eligible businesses, including self employed, and not-for-profits, until 28 March 2021. From 3 August 2020, the relevant date of employment will move from 1 March to 1 July 2020, which will increase employee eligibility for the existing scheme as well as the extension.
The payment of $1,500 per fortnight for eligible employees and businesses will be reduced to $1,200 per fortnight from 28 September 2020, and then to $1,000 per fortnight from 4 January 2021. From 28 September 2020, lower payment rates will apply for employees and businesses that worked less than 20 hours per week in the relevant period.
From 28 September 2020, businesses and not for profits looking to claim JobKeeper will need to demonstrate a decline in turnover using actual GST turnover, rather than projected GST turnover. In addition, they will be required to reassess their eligibility with reference to their actual GST turnover in the September quarter 2020 to be eligible for JobKeeper from 28 September 2020 to 3 January 2021.
From 4 January 2021, businesses and not for profits will be required to further reassess turnover to be eligible for JobKeeper. They will need to demonstrate they have met the relevant decline in turnover test based on their actual GST turnover in the December quarter 2020 to be eligible for JobKeeper from 4 January 2021 to 28 March 2021.
Under the extension, to be eligible, businesses and not for profits need to demonstrate they have experienced a decline in turnover of 50% for those with an aggregated turnover of more than $1 billion, or 30% for those with an aggregated turnover of $1 billion or less, or 15% for Australian Charities and Not For Profit Commission-registered charities (excluding schools and universities).
If an applicant does not meet the turnover test for the extension period, this will not affect their eligibility prior to 28 September 2020.
The JobKeeper scheme will continue to be open to new recipients, provided they meet eligibility criteria and turnover tests for the relevant payment period.
JobKeeper Payment Rates
According to treasury.gov, From 28 September 2020 to 3 January 2021, the JobKeeper payment rates will be:
- $1,200 per fortnight for all eligible employees who work 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged for 20 hours or more per week on average; and
- $750 per fortnight for other eligible employees and business participants.
From 4 January 20201 to 28 March 2021, payment rates will be:
- $1,000 per fortnight for all eligible employees who work 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged for 20 hours or more per week on average; and
- $650 per fortnight for other eligible employees and business participants.
Businesses and not for profits will need to nominate which payment rate they are claiming for each eligible employee or business participants.
The Commissioner of Taxation will set out alternative tests where an employee or business participant’s hours were not usual during the February and/or June 2020 reference period. For example, this would include then the employee was on leave, volunteering during bushfires, or not employed for all or part of February or June 2020. The ATO will provide guidance where an employee was paid in non-weekly or non-fortnightly pay periods and in circumstances that the rules do not cover.
The JobKeeper scheme will continue to be available to employers in arrears. Employers will be required to make payments 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 (referred to as wage condition).
Annual turnover tests
To qualify for JobKeeper from 28 September 2020, businesses will need to meet an additional decline in turnover test for each period of extension, as well as any other existing eligibility requirements for the JobKeeper.
To qualify for the first JobKeeper extension period of 28 September 2020 to 3 January 2021, businesses will need to show that their actual GST turnover has decline in the September quarter 2020 (July, August, September) relative to a comparable period (usually the same quarter in 2019).
To be eligible for the second JobKeeper extension period of 4 January 2021 to 28 March 2021, applicants will need to demonstrate their actual GST turnover has fallen in the December quarter 2020 (October, November, December) relative to a comparable period (typically the same quarter in 2019).
The Commissioner of Taxation will have discretion to set alternative tests in circumstances where it is not appropriate to compare actual turnover from a quarter in 2020 to a quarter in 2019. Click here to find out more.
Applicants will be able to assess eligibility based on their Business Activity Statement (BAS), with alternative arrangements for those who are not required to lodge a BAS.
What about employees?
Employees are eligible for the extension if they:
- Are currently employed by an eligible employer (including those stood down and re-hired)
- Were, for the eligible employer, a full time, part time, or fixed term employee at 1 July 2020; or a long term casual employee (on a regular and systematic basis for at least 12 months) at July 1 2020 and not a permanent employee of any other employer.
- Were aged 18 or older at 1 July 2020 (those 16 and 17 years of age can qualify if they are an independent or not undertaking full time study).
- Were either an Australian resident, or the holder of a Subclass 444 (special category) visa at 1 July 2020.
- Were not in receipt of any of: government parental leave or dad or partner pay; payments under Australian worker compensation law for incapacity to work; during a JobKeeper fortnight.
It is important to note that only one employer can claim the JobKeeper payment in respect to an employee.
Those who are self-employed will be eligible to receive Jobkeeper if they meet the annual turnover test and are not a permanent employee of another employer.
Employees will continue to receive JobKeeper payments through their employer during the period of extension if they and their employer are eligible and their employer is claiming JobKeeper. However, the amounts will change according to the dates specified above.
Need advice regarding JobKeeper?
We are here to help both businesses and employees with all of their JobKeeper Payment related queries, tax questions, bookkeeping and accounting needs. If you would like to book in a free first consultation, please get in touch with us anytime.