With JobKeeper due to enter its next phase on 28 September, it is important that businesses understand the key changes and what they need to do.
Key Changes
Business Eligibility
- From 28 September 2020, businesses/NFPs need to re-assess their eligibility
- Eligibility will be based on actual turnover in the September quarter 2020, compared to the same quarter in 2019
- The business/NFP will need to demonstrate that their income has declined by 30% (for aggregated turnover <$1b),to be eligible for JobKeeper from 28 September 2020 to 3 January 2021.
- Will need to further reassess their eligibility in January 2021 (based on the December quarter 2020) for the period from 4 January to 28 March 2021.
- Will generally be able to assess eligibility based on details reported in the Business Activity Statement (BAS). Alternative arrangements available for those that do not lodge BASs.
Employee Eligibility
- Reference date for eligible employees is now 1 July 2020 with effect from 3 August 2020 (previously 1 March 2020).
- Reference period for employees regarding hours worked to determine tier of payment will be:
- The two fortnightly pay periods (ie 4 weeks) prior to 1 March 2020 or 1 July 2020.
- The period with the higher number of hours is to be used for employees who were eligible at 1 March 2020.
Payment Rate
- There is a reduction in the payment amount and it will be paid at two rates:
From 28 September 2020 to 3 January 2021
- $1,200 per fortnight for employees & business participants, who worked 20 hours or more a week on average, in the reference period (per above); and
- $750 per fortnight for other eligible employees and business participants.
From 4 January 2021 to 28 March 2021
- $1,000 per fortnight for employees & business participants, who worked 20 hours or more a week on average, in the reference period (per above); and
- $650 per fortnight for other eligible employees and business participants.
- There will be alternative tests for unusual work hours in February and/or June for circumstances such as leave, volunteering during the bushfires, or not employed for all or part of February
Action Required
1. Confirm eligibility for the first extension period.
Turnover information to demonstrate that you satisfy the actual fall in turnover test for the September quarter can be provided from the start of October. It is important to note, that it must be provided before you complete your November monthly declaration.
For many businesses registered for GST, this calculation will match the ‘total sales’ reported at G1 on your BAS minus GST payable (1A), where applicable.
Note: Businesses 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.
2. Check if any previously ineligible employees are now eligible with the change of reference date to 1 July 2020.
- Have any existing casuals at 1 March 2020 that didn’t meet the 12 month employment requirement at 1 March, passed their 1 year anniversary before 1 July?
- Have any employees less than 18 years of age at 1 March 2020, turn 18 between 1 March and 1 July 2020?
- Do you have any new full time/part time employees that commenced work after 1 March 2020, but before 1 July 2020?
3. Determine eligible employee’s applicable payment tier (based on average hours for relevant period) to determine wage condition has been met.
Good News
To claim the JobKeeper Extension 1 or 2:
- You don't need to re-enrol for the JobKeeper extension if you are already enrolled for JobKeeper for fortnights before 28 September. You will just need to confirm you meet the decline in turnover.
- You don’t need to reassess employee eligibility or ask employees to agree to be nominated by you as their eligible employer if you are already claiming for them before 28 September. You will just need to confirm which payment tier applies to each employee.
- You don't need to meet any further requirements if you are claiming for an eligible business participant, other than those that applied from the start of JobKeeper relating to:
- holding an ABN, and
- declaring assessable income and supplies.
- You don't have to be an existing JobKeeper payment scheme recipient in order to apply for JobKeeper 2.0
If you need any assistance with determining the eligibility of your business, any new employees or determining employee’s payment tier. Please contact the team at GTC Financial on 07 49725177 or gtcfin@gtcfin.com.au .
Helpful Links:
https://treasury.gov.au/sites/default/files/2020-08/Fact_sheet-JobKeeper_Payment_extension_1.pdf