The Government has announced a six month extension to the JobKeeper payment which will run from 28 September 2020 to 28 March 2021. There have been changes to the payment rates for the extended periods as well as more frequent testing of actual turnover to confirm eligibility. Eligibility criteria for employees has also been increased.
Extended Eligibility Criteria – Employers
An employer with an annual turnover of $1 billion or less, will be eligible if their actual GST turnover has fallen by 30% or more. This criteria must be met each quarter as follows:
For payments made between 28 September 2020 and 3 January 2021, compare actual GST turnover for the September 2020 quarter with actual GST turnover for the September 2019 quarter.
For payments made between 4 January 2021 and 28 March 2021, compare actual GST turnover for the December 2020 quarter with actual GST turnover for the December 2019 quarter.
Please note these changes only come into effect from 28 September 2020.
It is up to businesses to determine the fall in actual turnover for each of the above periods. This is typically done through the details reported on the Business Activity Statements as the requirement is now to report actual turnover as opposed to projected turnover. Businesses should keep their records up to date in order to assess their eligibility and ensure sufficient wages are paid to eligible employees on time. If this becomes an issue however, the Commissioner of Taxation will have discretion to extend the time a business has to pay the wages so that they can first confirm their eligibility.
Changes to Payment Rates
The JobKeeper payment rate will be reduced during the extended period of 28 September 2020 to 28 March 2021. There are two different payment rates for eligible employees which are outlined below.
Between 28 September 2020 and 3 January 2021
Eligible employees will receive $1,200 per fortnight if the employee worked 20 hours a week or more (on average) in the four weeks of pay periods before 1 March 2020 or 1 July 2020. Eligible business participants need to have been actively engaged in the business for 20 hours a week or more (on average) in February or June 2020.
All other eligible employees & business participants will receive $750 per fortnight.
Between 4 January 2021 and 28 March 2021
Eligible employees will receive $1,000 per fortnight if the employee worked 20 hours a week or more (on average) in the four weeks of pay periods before 1 March 2020 or 1 July 2020. Eligible business participants need to have been actively engaged in the business for 20 hours a week or more (on average) in February or June 2020.
All other eligible employees & business participants will receive $650 per fortnight.
Changes to Employee Eligibility
The eligibility criteria for employees has been increased from 3 August to include individuals employed as at 1 July 2020.This change came into effect on 3 August 2020 and will affect the existing scheme as well as the extended periods.
An eligible employee is one who satisfies the following:
Currently employed by the employer (including those that have been stood down or re-hired).
Employed on a full-time or part-time basis or is a long-term casual (more than 12 months) as at 1 July 2020.
At least 18 years of age (or if you are 16 or 17 you may qualify if you are independent or not undertaking full time study) at 1 July 2020 .
A resident of Australia for social security purposes or for tax purposes on 1 July 2020.
Not nominating to accept JobKeeper payment from another employer.
Not in receipt of government-funded parental leave or dad and partner pay nor are they fully supported by a workers compensation scheme.
Other general rules for the JobKeeper payment have not changed, such as:
Payments will continue to be made by the ATO to employers in arrears.
Payments made to employees will still need to be paid at the applicable amount (before tax).
For further information on the original requirements of the JobKeeper payment go to: https://www.tspaccountants.com.au/covid-19-jobkeeper-payment/
You should always seek advice from your Accountant before making any decisions.
If you would like assistance with JobKeeper eligibility assessment or further information about the changes and how it will affect your business please contact our office.