Further to our ER Update dated 24 July, late last week the Government released some new details about how JobKeeper 2.0 will work. Many of those details are the same as what was outlined in the ER Update, however there are now some differences.
As previously advised, JobKeeper 2.0 has two parts or periods to it. They are:
- Period 1: 28 September 2020 – 3 January 2021
- Period 2: 4 January 2021 – 28 March 2021
The eligibility for each is detailed below – as well as the changes announced last week.
Employment Date: Change from 1 March to 1 July 2020 for Employee Eligibility
At the time this overview was written, the JobKeeper Rules (‘Rules’) have not been amended, however the key employment date for employee eligibility for the JobKeeper Payment Scheme is going to change. Previously, an employee needed to be employed and meet the other eligibility criteria at 1 March 2020 to be eligible for the Scheme.
The new employment date for eligibility will be 1 July 2020. This will apply to JobKeeper 2.0, however the Government’s announcement and information on the Treasury website also indicates that the new eligibility date applies to the current JobKeeper Scheme from the JobKeeper fortnight commencing 3 August 2020.
The current Rules will need to be formally amended to bring into effect the new eligibility date. Although the Rules have not been amended to clarify the application of the new eligibility date, employers could consider whether any additional existing employees will become eligible. This includes casual employees who did not have 12 months service at 1/3/20, and new permanent employees hired after 1 March 2020.
Please stay tuned for more information, including an update on any further Government announcements or further details when the Rules are amended. To confirm, the Rules must be amended for this new employment date to have effect.
JobKeeper 2.0: Employer Eligibility Changes
PERIOD 1: 28 SEPTEMBER 2020 – 3 JANUARY 2021
Employer Eligibility
As advised via the ER Update of 24 July, commencing from the fortnight commencing 28 September, employers will need to requalify for the JobKeeper Scheme. All of the eligibility requirements as per the current JobKeeper Scheme remain in place, with the exception of the decline in turnover test, which will change.
The Government had previously advised that to be eligible for the JobKeeper Scheme for the 28/9/20-3/1/21 period, an employer will need to demonstrate that they have suffered an ongoing significant decline in turnover using ACTUAL GST (as opposed to projected GST) for both the June 2020 and September 2020 quarters.
Today’s announcement confirms that an employer will only need to demonstrate the above decline for the September 2020 quarter ONLY – as relative to a comparable period, which may be the September 2019 quarter. A similar change will apply for period 2.
If an employer cannot demonstrate the relevant decline in turnover for the September quarter, they will not be eligible for the JobKeeper Scheme payments in Period 1.
The Commissioner of Taxation has the discretion to set out alternative tests to establish eligibility where it is not possible to provide that comparison. An example of this could be for a newly established business that has traded for less than one year. More information on alternative tests can be found HERE.
Employee Eligibility
The eligibility test for an employee will not change – the exception being the new employment date as advised above.
Payments
The amount the payments made in respect of an eligible employee will reduce as part of this stage of JobKeeper 2.0. As previously advised for period 1, they will be:
- For employees who work an average of 20 or more hours per week - $1,200 gross per fortnight (down from $1,500); and
- For employees who work an average of less than 20 hours per week - $750 gross per fortnight (down from $1,500).
This average of hours worked per week will be calculated from the four weeks of pay periods immediately prior to 1 March 2020, or prior to 1 July 2020. The period with the higher average will be used for employees who were eligible at 1 March 2020.
Businesses will be required to nominate which payment rate they are claiming for each of their eligible employees. Where an employee’s hours of work were not usual for the assessment period for the average hours of work eg the employee was on leave, the Commissioner of Taxation has discretion to set alternative tests. It is not clear at this stage what those will be.
PERIOD 2: 4 JANUARY 2021 – 28 MARCH 2021
Employer Eligibility
Commencing from the fortnight commencing 4 January, employers will need to requalify for this period of the JobKeeper Scheme. As with Period 1, all of the eligibility requirements currently in place are unchanged, with the exception of the decline in turnover test requirement.
For Period 2, an employer will need to demonstrate that they have suffered an ongoing significant decline in turnover using ACTUAL GST (as opposed to projected GST) for the December 2020 quarter only, as relative to a comparable period, which may be the December 2019 quarter.
The same as advised above applies for alternative tests.
Payments
The amount the payments made in respect of an eligible employee will reduce again from the JobKeeper Scheme fortnight commencing 4 January 2020.
As previously advised, the payments will be:
- For employees who work an average of 20 or more hours per week - $1,000 gross per fortnight (down from $1,200); and
- For employees who work an average of less than 20 hours per week - $650 gross per fortnight (down from $750).
Employee Eligibility
The eligibility test for an employee will not change – the exception being the new employment date as advised above.
JobKeeper Directions: Due to End 27 September 2020
There is no update to provide on whether JobKeeper Directions made as per the Fair Work Act 2009 will be extended into JobKeeper 2.0.
More Information
To view a copy of the latest JobKeeper 2.0 information, current as of Friday 7 August, click HERE to view the Treasury Fact Sheet.
To view a copy of the ER Update dated 24 July, please click HERE.
