On 21 July 2020 the Prime Minister, the Hon Scott Morrison MP, announced JobKeeper 2.0, the next iteration of the JobKeeper Payment Scheme (‘JobKeeper Scheme’).
Many employers had been wondering what would happen after 27 September 2020. In great news for businesses, the JobKeeper Scheme will be extended for six months past the current end date of 27 September. There will be, however, changes to the payment amounts, and more rigorous testing requirements for employer eligibility.
JobKeeper Scheme
Below is a summary of the Government’s announcement for the extension.
Please note that the current JobKeeper Rules, as detailed in the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020, will require amendment to formalise the extension of the JobKeeper Scheme post 27 September. Therefore, there may be additional information about the JobKeeper Scheme available closer to the end of September.
The last JobKeeper fortnight that is part of the current JobKeeper scheme finishes on 27 September. JobKeeper 2.0 commences from the fortnight starting 28 September and it will conclude the fortnight ending 28 March 2021.
It is important to note that JobKeeper 2.0 has two parts to it:
PERIOD 1: 28 September 2020 – 3 January 2021
Employer Eligibility
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.
What the change means is 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.
To recap, the decline in turnover figures are:
- An ongoing 30% fall in turnover for an Australian business or not for profit with an aggregated turnover of less than $1 billion for income tax purposes
- An ongoing 50% fall in turnover for an Australian business or not for profit with an aggregated turnover of $1 billion or more for income tax purposes
- A more than 15% fall in turnover for ACNC-registered charities other than universities and schools.
If an employer cannot demonstrate the relevant decline in turnover for both the June and September quarters, they will not be eligible for the JobKeeper Scheme payments in Period 1.
Employee Eligibility
The eligibility test for an employee will not change.
Payments
The amount the payments made in respect of an eligible employee will reduce as part of this stage of JobKeeper 2.0. 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).
The average of hours worked per week will be calculated from the four weeks of pay periods immediately prior to 1 March 2020. It is unclear who will work out the average, and how it will be calculated for employees who were on a form of approved leave, such as parental leave, at the time.
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 June 2020, September 2020 and December 2020 quarters.
If an employer cannot satisfy this requirement for all three quarters they will not be eligible for JobKeeper Scheme payments.
Payments
The amount the payments made in respect of an eligible employee will reduce again from the JobKeeper Scheme fortnight commencing 4 January 2020. 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.
Assessing Decline in Turnover
It is noted that the deadline for reporting September BAS is late October, and the deadline for reporting December BAS is late January. With this in mind, Treasury has advised that employers will need to assess eligibility in advance of the relevant deadline so that employees are paid the relevant JobKeeper payment as per the wage condition.
Wage condition is defined at section 789GD of the Fair Work Act 2009 (the ‘Act’), and requires employers to pay their eligible employees the JobKeeper payment in advance of receiving the ATO’s reimbursement of the payment.
This means that the for the first two JobKeeper fortnights in both Periods 1 and 2, an employer could be needing to make a JobKeeper payment before they have lodged their BAS. A good reason to monitor the situation closely.
JobKeeper Directions: Due to End 27 September 2020
Members would be aware of the current ability for an employer to issue a JobKeeper Enabled Direction to an employee they are receiving a JobKeeper payment for.
The Coronavirus Economic Response Package Omnibus (Measures No 2) Bill 2020, when passed on 9 April 2020, temporarily amended the Act to enable JobKeeper Enabled Directions to be issued, as well as for requests to be made in certain circumstances.
Refer to the QHA’s Fact Sheet on JobKeeper Enabled Directions for more information.
Due to the wording of amendments to the Act, the JobKeeper Enabled Directions provisions will automatically be repealed on 28 September 2020.
There has been no formal announcement on extending the temporary amendments to the Act, however, the QHA understands that Government will seek to extend the operation of JobKeeper Enabled Directions for employers who continue to be eligible for JobKeeper after 27 September.
An extension will require a legislative amendment to the Act.
DISCLAIMER:
The above represents information that is known about JobKeeper 2.0, as arising from the Government’s announcement of 21 July 2020. Once the required legislative and Rules amendments have occurred, members will be advised via future editions of the E-Update.
