Today, we wanted to run you through a summary of the changes that will be rolling out for Jobkeeper 2.0.
As you may be aware, the Government recently announced that the Jobkeeper Payment would be extended by a further six months to 28 March 2021.
With the additional criteria, they hope to provide appropriately targeted assistance for eligible employees and business participants.
Here are the key changes that you need to know about eligibility and payments for Jobkeeper 2.0.
Jobkeeper 2.0 – The Overview
- The scheme will be tapered with respect to both the December 2020 & March 2021 quarters.
- They will be operating a two-tiered payment system based on hours worked or active engagement in the business.
- Employers will need to re-assess their eligibility for the Jobkeeper scheme by the 28th September.
- To be eligible for the jobkeeper extension you must satisfy the new and modified decline in GST turnover test (defined in more detail below).
- This new test may mean that some employers who previously qualified for the scheme may no longer qualify after 27 September 2020
- New employees/staff who started on or before 1 July 2020 can be eligible
What is the New Actual GST Decline in Turnover Test?
This revised eligibility test for Jobkeeper 2.0 will be broken up into two separate extension periods as follows:
(a) Extension Period 1
- Applies to Jobkeeper fortnights that start on or after 28 September 2020 and end on or before 3 January 2021.
- You will satisfy the test if your entity’s actual GST turnover has declined by the required percentage (i.e., either 30% or 50%) for the quarter ending 30 September 2020, relative to its September 2019 quarter.
(b) Extension Period 2
- Applies to Jobkeeper fortnights that start on or after 4 January 2021 and end on or before 28 March 2021.
- You will satisfy the test if your entity’s actual GST turnover has declined by the required percentage (i.e., either 30% or 50%) for the quarter ending 31 December 2020, relative to its December 2019 quarter.
Note: An entity will not be excluded from qualifying for the Jobkeeper program in “Extension Period 2” if they did not qualify in Extension Period 1 (or for the original Jobkeeper scheme prior to 28 September 2020).
PS: If you’re unsure what GST turnover means, the ATO define it as follows:
“Your GST turnover is your total business income (not your profit), minus any:”
- GST amounts
- Input taxed sales
- Sales not connected to your business (private sales)
- Sales not made for payment
- Payments for no supply
- Gifts and donations (aside from those mentioned above)
- Sales not connected with Australia”
How to Qualify for Jobkeeper 2.0
1) If you’re applying for the first time
If you haven’t applied or been receiving any Jobkeeper Payments as part of the original supplement (30 March 2020 – 27 September 2020), but have experienced a decline in actual GST turnover for the September 2020 quarter, you may qualify for the Jobkeeper payments for Extension Period 1, as outlined above.
You will also need to satisfy all the other eligibility criteria as in Jobkeeper 1.0 (e.g. That your business was operating in Australia on 1 March 2020).
This also applies to employers and entities with eligible business participants.
2) Re-qualifying under JobKeeper 2.0
If you’re business originally qualified for Jobkeeper 1.0 (up until 28 September 2020), but you discover that you don’t qualify for Extension Period 1 of JobKeeper 2.0, you can reapply again in January for the Extension Period 2.
Especially, if you experience the required decline in actual GST turnover for the December 2020 quarter.
Sole traders who are not GST registered also need to pass the 3 month GST turnover test for the quarter ending 30 September 2020, relative to its September 2019 quarter.
New Wage Conditions for Employees
From 28 September 2020, a two-tiered payment system will apply for employees.
This means that the amount received for Jobkeeper payments will depend on the fortnight in question, as set out below:
The payment rate applicable to an employee is determined by reference to the actual hours the employee worked, had paid leave and paid absence on public holidays over an applicable ‘reference period’.
The applicable rate is determined as follows:
- If an employee’s total hours worked were 80 hours or more over an applicable 28-day reference period (Feb or July 2020 depending on the employee’s start date), then the employer is entitled to the higher rate in respect of that employee.
- If the total hours worked and equivalent paid leave are less than 80 hours over the applicable 28-day reference period (Feb or July 2020 depending on the employee’s start date), then the lower rate applies.
It is the responsibility of the employer to determine the number of hours that count towards the threshold for an eligible employee. It must be based on existing records that are already maintained in respect of that employee.
We hope that helps to explain Jobkeeper 2.0 in a way that is easy for you to understand.
If you have any further questions or need help applying, please give us a call on (03) 9762 7344.
Here are some other Business Grant links you may find helpful:
NOTE: When applying for the business grants, you will now need to add your ANZSIC code.
You’re able find your relevant code by using the link above.
We wish you all the best!