The Government has announced changes to the JobKeeper scheme which will come into affect on 28 September 2020, including an extension of the scheme, lower payment rates, and eligibility re-assessments. The existing JobKeeper rules and arrangements will stay in place until the end of September. We have detailed the changes below. Please be aware there is no legislation yet for these changes so they are subject to change.
The Government has advised that the scheme will be extended until 28 March 2021 (for eligible businesses). The payment rate will also reduce, as well as further reductions for employees who work less than 20 hours per week. Additionally, businesses will be required to re-assess their eligibility and continue to meet the relevant decline in turnover to stay eligible.
The payment rate of $1,500 per fortnight will continue until 28 September 2020. These rates will change to a reduced two-tiered payment system in September and will reduce again in January. From 28 September 2020 to 3 January 2021, the JobKeeper rates will be as follows:
$1,200 per fortnight for all eligible employees who work 20 hours per week (or more) on average. The average hours per week is calculated based on the four weeks of pay periods before 1 March 2020. Eligible business participants need to have been actively engaged in the business for 20 hours per week (or more) on average in the month of February 2020.
$750 per fortnight for other eligible employees or eligible business participant who did not work above 20 hours per week on average.
From 4 January 2021 to 28 March 2021, the JobKeeper rates will be as follows:
$1,000 per fortnight for all eligible employees who work 20 hours per week (or more) on average. The average hours per week is calculated based on the four weeks of pay periods before 1 March 2020. Eligible business participants need to have been actively engaged in the business for 20 hours per week (or more) on average in the month of February 2020.
$650 per fortnight for other eligible employees or eligible business participant who did not work above 20 hours per week on average.
The ATO will have discretion to set out an alternative test when the month of February 2020 was not indicative of normal work hours (i.e. on leave, volunteering during bushfires etc). Additional guidance will also be provided by the ATO for circumstances where an employee was paid in non-weekly or non-fortnightly pay periods. The wage payments still need to be paid to your employees during the relevant JobKeeper fortnight. The above figures are before-tax amounts.
In order to stay eligible from 27 September onwards, businesses will need to meet further decline in turnover tests for each of the extension periods. There is no re-assessment of eligibility required until the end of September. or the period 28 September 2020 to 3 January 2021, to stay eligible businesses must:
Demonstrate that their actual GST turnover has fallen by the relevant decline (in most cases at least 30%) in both the June 2020 quarter and the September 2020 quarter, relative to the corresponding quarters in 2019.
Businesses need to apply and satisfy the new eligibility tests at the start of October 2020.
For the period 4 January 2021 to 28 March 2021, to stay eligible businesses must:
Demonstrate that their actual GST turnover has fallen by the relevant decline (in most cases at least 30%) in the June 2020 quarter, September 2020 quarter and December 2020 quarter relative to the corresponding quarters in 2019.
Businesses need to apply and satisfy the new eligibility tests at the start of January 2021.
For each of the periods above, businesses will need to assess their eligibility before the BAS lodgement deadline (for the September 2020 and December 2020 quarters) in order to assess if they will still be eligible and subsequently pay their employees the minimum amount in the relevant JobKeeper fortnight.
For entities who do not lodge BAS, alternative arrangements will be available. Also, alternative testing will still be available for businesses whereby it is not appropriate to compare actual turnover in 2020 to the corresponding period in 2019 (such as new entities, impacted by bushfires etc).
As legislation is introduced to parliament and further details of the JobKeeper changes become available, we will continue to update you on their practical application to you.