Parliament has signed-off on the JobKeeper 2.0 extension, which introduces a new fortnightly payment scheme for participants from 28 September 2020 to 28 March 2021.
We’ve highlighted the new changes introduced as part of JobKeeper 2.0, and outlined what businesses need to know and undertake at each extension period.
What Employees & Business Participants will receive?
Under the legislated changes to the Extended Scheme, “JobKeeper 2.0” will contain a two-tier payment scheme, dependent on the number of hours an employee has worked during the relevant reference period.
The reference period is the four weeks of pay periods before either 1 March 2020 or 1 July 2020. Workers with 1 March 2020 eligibility are able to use the period with the higher number of hours worked.
Period of Time
(worked 80 hours or more in the reference period)
(worked less than 80 hours in the reference period)
|Phase One||28 September 2020 - 3 January 2021||$1,200 per fortnight||$750 per fortnight|
|Phase Two||4 January 2021 - 28 March 2021||$1,000 per fortnight||$650 per fortnight|
The rate of the JobKeeper Payment received by business participants will depend on the number of hours an eligible business participant is actively engaged in the business, and will be split into two tiers:
- Tier 1- (Eligible for Full Rate) – this rate applies to eligible business participants who were actively engaged in the business for 80 hours or more in February 2020 and provide a declaration to that effect;
- Tier 2 – (Eligible for Partial Rate) – this rate applies to any other eligible business participant.
The rate of payment for the eligible business participant tiers is:
|Tier 1||Tier 2|
|28 September 2020 - 3 January 2021||$1,200 per fortnight||$750 per fortnight|
|4 January 2021 - 28 March 2021||$1,000 per fortnight||$650 per fortnight|
It is important to note that business participants must keep records to show they were actively engaged in the business. These records might include business diaries, appointment books, log books, hours billed, invoices issued, time sheets or attendance records, or records prepared for other business or statutory purposes.
Important Notification Requirements
Employers need to advise the ATO which payment tier they are claiming for each eligible employee or business participant in the approved form. At this stage, the ATO has not released the approved form.
Once notified, employers must also notify each employee in writing of their high or low JobKeeper rate within 7 days. Failure to notify employees within 7 days will result in ineligibility to claim JobKeeper for those employees.
Under the Extended Scheme, businesses will need to demonstrate a 30% or 50% actual decline in turnover as follows:
- 30% for employers with annual turnover below $1 billion;
- 50% for employers with annual turnover above $1 billion;
- 15% for ACNC Registered Charities
The previous ‘Turnover Test’ from the initial JobKeeper Program will also be reapplied at two further stages – end of September 2020 & December 2020, and will be based on the actual GST Turnover compared with the same BAS periods in the 2019 Year.
As such, the new ‘Decline in Turnover’ test rules will operate as follows:
|28 September 2020 - 3 January 2021||You will need to demonstrate that your actual GST Turnover has fallen in the September 2020 Quarter relative to the September 2019 Quarter.|
|4 January 2021 - 28 March 2021||You will need to demonstrate that your actual GST Turnover has fallen in the December 2020 Quarter relative to the December 2019 Quarter.|
Businesses will generally be able to assess eligibility based on details reported on their Business Activity Statement (BAS).
For JobKeeper fortnights starting 28 September 2020, and 12 October only, the ATO are allowing employers until 31 October 2020 to meet the wage condition for all employees included in the JobKeeper scheme.
The deadline to lodge the September BAS is in late October (monthly) or late November (quarterly), and the December BAS is in late January (monthly) or late February (quarterly). Therefore, businesses will need to assess their JobKeeper eligibility in advance of the BAS deadline in order to meet the wage or activity condition.
What Hasn’t Changed?
- You don't need to re-enroll for the JobKeeper Extension if you are already enrolled for JobKeeper for fortnights before 28 September 2020;
- 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 those employees before 28 September 2020;
- 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 beginning for the JobKeeper Program, such as holding an ABN or declaring income & supplies.
For More Information
For more information on the JobKeeper 2.0 changes coming into effect from 28 September, and how this impacts you & your business, please contact your Archer Gowland Redshaw adviser on (07) 3002 2699 or (07) 3221 4004.