The Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020 was passed through both Houses of Parliament on 1 September 2020, which followed an announcement by Prime Minister Scott Morrison on 21 July 2020 that the ‘JobKeeper’ payments would be extended beyond 31 December 2020.
What does it all mean?
The current scheme, known as JobKeeper 1.0, will end on 27 September 2020 and JobKeeper 2.0 will commence on 28 September 2020.
The most significant change between JobKeeper 1.0 and 2.0 is the reduction in the amount of the JobKeeper payment.
Under the JobKeeper 1.0 scheme, the rate of payment was $1,500 per fortnight for each eligible employee. Under JobKeeper 2.0, the JobKeeper payment has been separated into two payment tiers:
- $1,200 per fortnight per eligible employee who works 20 hours or more per week.
- $750 per fortnight per other eligible employees.
The above payment schemes run from the commencement of JobKeeper 2.0 until 3 January 2021 (First Extension Period). From 3 January 2021 until 28 March 2021 (Second Extension Period), the two payments will be reduced further to:
- $1,000 per fortnight per eligible employee who works 20 hours or more per week.
- $600 per fortnight per other eligible employee.
The payment of the above amounts will continue to be administered through the Australian Taxation Office to the employer in arrears. The employer will still need to make payments to the employees of an equal, or greater, amount to the relevant JobKeeper payment.
The new criteria for businesses
For a business or charitable group to be eligible for JobKeeper 2.0, a business or charitable organization will need to demonstrate that there has been a decline in turnover of:
- 50% for those with an aggregated turnover of more than $1 billion;
- 30% for those with an aggregated turnover of $1 billion or less;
- 15% for Australian Charities and Not-for-profits Commission-registered charities (this excludes schools and universities).
The decline in revenue is based on a comparison of actual GST turnover whereas JobKeeper 1.0 was based on projected GST turnover.
For a business to be eligible for the First Extension Period, the employer will need to show that there is a decline in revenue by reference to the September quarter 2020 that is relative to a comparable period of the corresponding quarter for a previous year. For example, the September 2020 revenue decline is set by reference to the amount earned in September 2019 revenue.
For a business to be eligible for the Second Extension Period, the decline in revenue will need to be shown in reference to the December quarter 2020 and relative to the corresponding quarter for the previous year (December 2019).
While the eligibility tests work for some businesses, there are other businesses where a comparable quarter for previous years would not suffice, due to the type of business, or if the business has only recently been established. As the ATO makes the payments to the eligible businesses, the Commissioner of Taxation has the ability to set a different test if the comparable quarter is not an appropriate test.
Eligibility of employees
The eligibility criteria remain same for employees with the exception that the relevant employment date from which the employee must be employed moves from 1 March 2020 to 1 July 2020.
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