Jobkeeper 2.0 - Action required
It’s been a stressful time for many– with the end date of JobKeeper 1.0 in sight. Good news this week with the rules for JobKeeper 2.0 being legislated, providing some much needed clarity, despite no end to Victoria’s lockdown restrictions.
What you need to know:
Entities that were not previously able to enrol in the original JobKeeper scheme may be able to qualify for JobKeeper 2.0.
Employees that were previously ineligible may now become eligible under JobKeeper 2.0.
What you need to do now:
The entity’s accounts should be updated, to allow a preliminary assessment to be made of eligibility – under the decline in turnover test. This will need to be reconfirmed based on actual results for the September 2020 quarter.
Consider employees’ eligibility and the rate of payment based on the applicable reference period.
Ensure BAS lodgements are up to date to avoid any delays in processing your JobKeeper application.
More detail:
JobKeeper 2.0 begins on 28 September 2020 and runs until 28 March 2021. Within that, there are two extension periods:
29 September 2020 – 3 January 2021
4 January 2021 – 28 March 2021
Eligibility under each extension period is subject to testing. That testing happens on a standalone basis. This is to say that participation in JobKeeper 2.0 is not dependent on a business’ eligibility under the current rules (or on the September period, for the latter extension period).
The turnover test applies based on turnover measured in the same way as the organisation’s GST reporting.
For eligible employers, a subsidy is payable per eligible employee, based on the hours that the employee worked in the reference period.
The rates of payment apply as follows:
Tier 1 rate for eligible employees who worked for 80 hours or more in the four weeks before 1 March (or 1 July).
Tier 2 rate applies to other eligible employees.
| Extension Period | Tier 1 Rate Per fortnight | Tier 2 Rate Per fortnight |
|---|---|---|
| 29 September 2020 – 3 January 2021 | $1,200 | $750 |
| 4 January 2021 – 28 March 2021 | $1,000 | $650 |
The reference period is the 28-day period that ends most recently before 1 March 2020 or 1 July 2020, based on the organisation’s usual pay period and depending on when the employee first became eligible for JobKeeper. The latter reference date applies for newly eligible employees of qualifying employers after 3 August. The employee must have total hours of work, paid leave and paid absence of 80 hours or more in the reference period.
An alternative reference period may apply in certain circumstances.
The test for business participants differs. They need to have been ‘actively engaged’ in the business for the required number of hours in the reference period during the month of February 2020.
There is the additional requirement for business participants to prepare a declaration, which, for sole traders, is supplied to the Commissioner.
Turnover is measured on the basis actual GST turnover, using the same basis of accounting consistently over comparison periods. To qualify for each extension period the following turnover tests apply:
| Extension Period | Compare this period | To this period | Decline in turnover |
|---|---|---|---|
| 29 September 2020 – 3 January 2021 | September quarter 2020 | September quarter 2019 | Must meet the required threshold 15%/30%/50% (as applicable) |
| 4 January 2021 – 28 March 2021 | December quarter 2020 | December quarter 2019 |
Some entities may need to consider alternative turnover tests as a basis for qualifying for the scheme. They are of particular relevance to:
o Entities that have undergone changes including acquisition/ disposal/ restructure
o New businesses (start-ups);
o Entities in growth phase;
o Entities with irregular turnover
Any “top up” payments required for October 2020 can be made as late as 31 October 2020.
For further information please contact:
Leanne Spiteri
We’re Virtue. And we’re here to help. This summary for general information based on JobKeeper 2.0 rules as they stand today. Please seek advice specific to your circumstances from a qualified advisor.
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