The Federal Government recently announced an extension of the JobKeeper wage subsidy until 28 March 2021.
The new-look scheme will operate through a two-tiered approach, with a lower rate for casuals and part-time workers. Payment will be closely aligned to the hours worked by employees receiving the payment.
There are two separate extension periods. For each extension period, an additional actual fall in turnover test applies and the rate of the JobKeeper payment is different.
NEW PAYMENT RATES
28 September 2020 to 3 January 2021
- Tier 1 – Worked 20 hours or more: $1,200 per fortnight
- Tier 2 – Worked under 20 hours: $750 per fortnight
4 January 2021 to 28 March 2021
- Tier 1 – Worked 20 hours or more: $1,000 per fortnight
- Tier 2 – Worked under 20 hours: $650 per fortnight
- Employers can be eligible for JobKeeper Extension 2 even if they were not eligible for JobKeeper Extension 1
There are two rates (Tier 1 and Tier 2) for each extension period. The rate of JobKeeper Payment that will apply will depend on the number of hours an eligible employee works, or an eligible business participant is actively engaged in the business.
Tier 1 Rate
This rate is expected to apply to:
- eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and
- eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration to that effect.
Tier 2 rate:
This rate is expected to apply to:
any other eligible employees and eligible business participants.
Businesses will now need to reassess their turnover for each of the 2 new periods:
Extension 1 (28 September 2020 to 3 January 2021) you’ll need to demonstrate that your actual GST turnover has fallen in the September 2020 quarter and compare it to the same quarter in the previous year.
Extension 2 (4 January 2021 to 28 March 2021) you’ll need to demonstrate that your actual GST turnover has fallen in the December 2020 quarter and compare to the previous year’s quarter.
To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of: \
- 50% for those with an aggregated turnover of more than $1 billion;
- 30% for those with an aggregated turnover of $1 billion or less;
- 15% for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).
If a business or not-for-profit does not meet the turnover test for the extension period, this does not affect their eligibility prior to 28 September 2020. The JobKeeper Payment will continue to remain open to new recipients, provided they meet the eligibility requirements and the turnover tests that apply during the relevant JobKeeper Payment period.
Workers will qualify for the JobKeeper extension if they were employed on 1 July 2020, rather than 1 March 2020, as previously required.
These changes impact employees who were not previously eligible due to not being currently employed on 1 March 2020 and casuals who were ineligible due to not being employed for the 12 months leading up to 1 March 2020.
These changes do not affect those that were already qualified for JobKeeper on 1 March 2020. These employees remained eligible for JobKeeper until 27 September 2020.
JobKeeper can now apply for anyone who commenced fulltime or part-time work after 1 March 2020 but before 1 July 2020 or any long-term casuals who have now completed their 12 months of employment i.e. those who started between 3 March 2019 & 2 July 2019.
WHAT EMPLOYERS NEED TO DO
From 28 September 2020, employers intending to claim should do all of the following:
- Ensure eligibility using the quarterly turnover test;
- Work out if the Tier 1 or Tier 2 rate applies to each of your eligible employees and/or eligible business participants and/or eligible religious practitioners;
- Notify the ATO and your eligible employees and/or eligible business participants and/or eligible religious practitioners what payment rate applies to them; and
- During JobKeeper Extension 1, ensure your eligible employees are paid at least:
$1,200 per fortnight for Tier 1 employees
$750 per fortnight for Tier 2 employees
- During JobKeeper Extension 2, ensure your eligible employees are paid at least
$1,000 per fortnight for Tier 1 employees
$650 per fortnight for Tier 2 employees.
If eligible employees are paid less than the specified amounts, a top-up payment must be made to the specified amounts and reported, as per the current reporting arrangements for JobKeeper top-up payments.
DISCLOSURE TO FAIRWORK
The Treasury Laws Amendment (2020 Measures No. 2) Bill 2020 received royal assent on Thursday 3rd September 2020.
The bill makes amendments to the tax secrecy provisions in the Tax Administration Act to allow protected information relating to the JobKeeper scheme to be disclosed to the Fair Work Commission and the Fair Work Ombudsman for the purposes of the administration of the Fair Work Act 2009.
Under previous law, the Tax Commissioner could only disclose to the Fair Work Ombudsman the fact that an entity has not complied with a taxation law or is reasonably suspected of such non-compliance for the purpose of ensuring the entity’s compliance with the Fair Work Act 2009.
With the passing of the bill, a taxation officer can additionally disclose protected information that relates to the JobKeeper scheme to the Fair Work Commission or the Fair Work Ombudsman for the purposes of the administration of the Fair Work Act 2009.
It is highly recommended that you seek individual advice from your accountant to ascertain compliance and eligibility to JobKeeper 2.0.
LINKS FOR ADDITIONAL READING
Full ATO announcement:
More information on the eligibility rules for businesses and not-for-profits and their employees is at:
Further information on reference periods and 80 hours thresholds
Treasury Laws Amendment (2020 Measures No. 2) Bill 2020.