JobKeeper V2.0: the changes you need to know
JobKeeper extended with some changes
The JobKeeper payment will soon be changing.
In order to support businesses through a potentially prolonged economic downturn due to the pandemic, the government has confirmed it will extend JobKeeper beyond the current end date of 27 September to 28 March 2021.
The extension of the payment comes with significant changes, including:
- an introduction of a part-time rate for those who were employed less than 20 hours per week;
- a slow tapering of the payment rate from $1,500 to $1,000 per fortnight; and
- more stringent eligibility requirements.
Reduced payment rate & new part-time rate
While the government has extended the JobKeeper to 28 March 2021, not everyone currently on JobKeeper will be treated the same.
Part of the changes include the introduction of a part-time rate to “better align the payment with the incomes of employees before the onset of the COVID-19 pandemic”.
Another significant change is the slow tapering down of the payment rate from the current $1,500 to $1,000 by 28 March 2021.
Full fortnightly rate
Part-time rate (< 20 hrs/fortnight)
28 September 2020 to 3 January 2021
4 January 2021 to 28 March 2021
Employees who were employed for less than 20 hours a week on average in the four weekly pay periods ending before 1 March 2020 will receive the part-time rate from 28 September 2020.
Businesses will therefore be required to nominate which payment rate they are claiming for each of their eligible employees.
Payment by the ATO will continue to be made in arrears, and alternative tests are available where the employees’ hours were not usual during the February 2020 reference period.
New eligibility rules
In addition to the change in payment rates, businesses that want to continue claiming the JobKeeper payment after 27 September 2020 will be required to reassess their eligibility by reference to their actual GST turnover in the June 2020 and September 2020 quarters (as compared to the same quarters in 2019) as well as satisfying existing eligibility requirements.
Therefore, it may be possible for businesses to be eligible for the first extension (28 September 2020 to 3 January 2021) and not the second extension (4 January 2021 to 28 March 2021) depending on economic and trading conditions.
To be eligible for JobKeeper for the period 28 September 2020 to 3 January 2021, businesses will need to demonstrate that their actual GST turnover has significantly fallen in both the June quarter 2020 (April, May and June) and the September quarter 2020 (July, August, September) relative to comparable periods (generally the corresponding quarters in 2019).
Similarly, to be eligible for the second JobKeeper extension from 4 January to 28 March 2021, businesses will again need to demonstrate that their actual GST turnover has significantly fallen in each of the June, September and December 2020 quarters relative to comparable periods (generally the corresponding quarters in 2019).
A 30% decline is considered significant (in line with existing eligibility requirements) for most businesses not including not-for-profits.
Assessing your eligibility for JobKeeper under the new rules
As the deadline to lodge a BAS for the September quarter (or month) is in late October, and the December quarter (or month) BAS deadline is in late January for monthly lodgers or late February for quarterly lodgers, businesses will need to assess their eligibility for JobKeeper in advance of the BAS deadline in order to meet the wage condition.
This condition requires employers to pay their eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO.
Therefore, businesses must be careful if they are intending to claim the JobKeeper payment under the new rules.
However, the Commissioner will have a discretion to extend the time an employer has to pay employees in order to meet the wage condition, so that entities have time to first confirm their eligibility.
Need help with working out eligibility?
If you need help to work out whether your business is eligible for JobKeeper under the new rules or whether certain employees will soon need to be paid a part-time rate, contact us today, we can help work out your eligibility in advance and plan for the new payment rates to your employees.
Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.