We can all agree that this year has been unprecedented, with Covid-19 taking hold and the stresses that it has caused to many businesses around the world. Early on when the countries services were being closed down and restrictions being put in place, the federal government announced the JobKeeper Payment to help businesses cope with shutdowns, and allow employees to keep being paid whilst hours were cut. It has allowed many businesses to stay afloat during these hard times, and many businesses have also reassessed the way they do business, and changed the way they operate in many ways.
As the end of the JobKeeper is getting closer, the federal government announced JobKeeper 2, which will be an extension of the JobKeeper Payment but with some significant differences to both eligibility and the amount of payment that recipients will receive.
Business Eligibility
Businesses and not-for-profits seeking to claim JobKeeper will need to re-assess their eligibility for the JobKeeper extension. To be eligible during the period of 28th September 2020 and 3rd January 2021, businesses will need to prove they have met the relevant decline in their actual GST turnover during the September quarter. Unlike the original JobKeeper Payment you will then need to re-assess your eligibility in the next quarter to receive the payment.
Note: It was originally announced that businesses would need to prove a turnover drop for 2 quarters(June and September) to qualify however, Treasurer Josh Frydenberg announced that this would be changed to the one quarter for eligibility.
Example #1 – July to September quarter
Turnover for July to September 2019 – $200,000
Turnover for July to September 2020 – $120,000
The above would result in a 40% drop which meets the 30% drop in turnover test for that quarter.
Example #2 – October to December quarter
If in the following quarter the same business has the following comparison:
Turnover for October to December 2019 – $200,000
Turnover for October to December 2020 – $160,000
In this example the business would not meet the test as the drop in turnover was only a 20% drop in turnover. They would be deemed ineligible for the JobKeeper payment.
Employers
Only one employer can claim the JobKeeper Payment in respect of an employee.
Self Employed
The self-employed will still be eligible to receive the JobKeeper Payment where they meet the relevant turnover test, and are not a permanent employee of another employer.
Employees
Employees are eligible in the extension period if they:
• are currently employed by an eligible employer (including if you were stood down or rehired)
• were for the eligible employer (or another entity in their wholly-owned group) either:
– a full-time, part-time or fixed-term employee at 1 July 2020; or
– a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer.
• were aged 18 years or older at 1 July 2020 (if you were 16 or 17 you can also qualify if you are independent or not undertaking full time study).
• were either:
– an Australian resident (within the meaning of the Social Security Act 1991); or
– an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020.
• were not in receipt of any of these payments during the JobKeeper fortnight:
– government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010; or
– a payment in accordance with Australian worker compensation law for an
individual’s total incapacity for work.
Note – The eligibility for employees was recently changed too. To be eligible, employees must be a full-time, part-time or fixed-term employee at 1 July 2020 or a long-term casual employee (employed on a regular and systematic basis for at least 12 months). Previously this was announced as the 1st March, but was also adjusted in the latest announcement.
New Payment Rates
28th September 2020 – 3rd January 2021
JobKeeper will decrease to $1,200 a fortnight for those employees who work more than 20 hours per week.
A new Tier 2 for employees who work less than 20 hours per week will be introduced. Employees in this tier will have their payments reduced to $750 a fortnight.
4th January 2021 – 28 March 2021
JobKeeper will decrease to $1,000 a fortnight for those employees who work more than 20 hours per week and $650 a fortnight for employees who work less than 20 hours per week.
References
Treasury Fact Sheet – JobKeeper 2
Data
The Treasury also has released data regarding the number of organisations that have had their applications processed during April and May fortnights.
Sydney has the most applications in both months, followed by Melbourne.
The 2170(NSW) post code was 3rd, which includes Casula, Liverpool and more.
The 3029 postcode Hoppers Crossing(Vic) was 4th on the list whilst 4870 (Cairns region) came in with the 5th most applications.
You can download the data sheet on the Treasury website here.
Moving Forward
One thing that we learnt from the previous JobKeeper was that it is highly likely to be adjusted over time. Although this time around the government had much more time to plan the new scheme, it will likely need some tweaking where needed.
JobKeeper 2 has not been legislated as yet, so there are highly likely to be changes to this new extension, along with clarification amongst some of the finer points.