JobKeeper 2.0 - What you need to know!
This post has been updated to reflect the changes made to JobKeeper eligibility on 7 August 2020. The ATO also has a timeline of updated
JobKeeper criteria and events, which you can access here.
The extension of the JobKeeper scheme changes the eligibility test for employers and the method and amount paid to employees.
If your business currently receives JobKeeper, your arrangements will generally remain unchanged until 27 September 2020. From 28 September 2020, employers seeking to claim JobKeeper payments will need to reassess their eligibility and prove an actual decline in turnover.
You can download the official government JobKeeper Extension Fact Sheet here.
Eligibility for Employers
From 28 September 2020, businesses and not-for-profits seeking to claim JobKeeper Payment will be required to re-assess their eligibility for the JobKeeper extension with reference to their actual turnover in the September quarter 2020. Businesses and not-for-profits will need to demonstrate that they have met the relevant decline in turnover test in this quarter to be eligible for JobKeeper from 28 September 2020 to 3 January 2021.
Businesses and not-for-profits will need to further reassess their eligibility in January 2021 for the period from 4 January to 28 March
2021. Businesses and not-for-profits will need to demonstrate that they have met the relevant decline in turnover test in the December
quarter 2020 to remain eligible for the March quarter 2021.
"Decline in Turnover" Tests
To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will need to demonstrate that they have experienced the following decline in turnover (which remains the same percentage as the existing rules):
- 50% for those with an aggregated turnover of more than $1 billion;
- 30% for those with an aggregated turnover of $1 billion or less; or
- 15% for Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities).
The Commissioner of Taxation will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019, in line with the Commissioner’s existing discretion.
The reference date for assessing which employees are eligible for the JobKeeper Payment is now 1 July 2020 with effect from 3 August 2020.
The reference period for employees regarding their hours worked to determine their tier of payment will be the two fortnightly pay periods 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.
Employee eligibility will remain broadly the same but the value of the payment will change from 28 September based on average weekly hours in February 2020.
Eligible employees are those who...
- Are currently employed by an eligible employer (including if you were stood down or rehired)
Were for the eligible employer (or another entity in their wholly-owned group) either:
- A full-time, part-time or fixed-term employee at 1 July 2020; or
- A long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer.
- Were aged 18 years or older at 1 July 2020 (if you were 16 or 17 you can also qualify if you are independent or not undertaking full time study).
- An Australian resident (within the meaning of the Social Security Act 1991); or
- An Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020.
Were not in receipt of any of these payments during the JobKeeper fortnight:
- Government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010; or
- A payment in accordance with Australian worker compensation law for an individual's total incapacity for work. Only one employer can claim the JobKeeper Payment in respect of an employee.
JobKeeper Payment Rate
From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:
- $1,200 per fortnight for all eligible employees who were working in the business or not-for-profit for 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 in the business for 20 hours or more per week on average; and
- $750 per fortnight for other eligible employees and business participants.
From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:
- $1,000 per fortnight for all eligible employees who were working in the business or not-for-profit for 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 business participants who were actively engaged in the business 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 be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants)
Can I keep getting JobKeeper until September?
If your business and your employees passed the original eligibility tests to access JobKeeper, and you have fulfilled your wage requirements, you can continue to claim JobKeeper up until the last JobKeeper fortnight that ends on 27 September 2020.
ATO assistant commissioner Andrew Watson said in a recent interview, “Once you’re in, you’re in to the end of September. If you meet the eligibility test once, you’re in it for the whole time.” The original eligibility test was a once only test although there are ongoing conditions that need to be satisfied for each JobKeeper fortnight.
The ATO has already taken steps to catch out fraudulent JobKeeper activity, and it will continue to be a focus for them going forward. These new regulations and criteria coming in from 28 September 2021 are extremely complex, and we highly recommend you do not apply for any stimulus without consulting a trusted advisor, like your tax agent, first.
Click here for a full list of other assistance and Government stimulus available during COVID-19, including financial hardship and mental health helplines.