Are you eligible for JobKeeper 2.0?

23 September, 2020 by Andy Young

In July the Federal Government announced the findings of its three-month review into its JobKeeper Payment, which saw the payment extended until March 2021, but also saw a tightening around employer and employee eligibility.

Those changes will come into effect on 28 September and it is expected that the number of workers who will be eligible for the wage subsidy will drop by as much as two million.

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In its three-month review the Government said that JobKeeper had a large take-up at over 920,000 organisations and around 3.5 million individuals over the April-May period. The scheme represented 30 per cent of pre-coronavirus levels of private sector employment, with organisations and individuals supported in all sectors across all parts of the country. As at 23 June payments totalled $20.3bn over the four payment fortnights to 24 May.

The scheme was originally planned to last six months, but with many businesses still significantly impacted by COVID-19 and major concerns around the stability of the economy, JobKeeper was extended to 28 March 2021.

However the revised eligibility for the scheme will be based on actual turnover, with the actual payment reduced and paid at two rates.

From 28 September 2020, businesses and not-for-profits seeking to claim JobKeeper Payment will be required to re-assess their eligibility for the JobKeeper extension with reference to their actual turnover in the September quarter 2020.

You will need to show that your actual GST turnover has declined in the September 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019).

You also need to have satisfied the original decline in turnover test. However, if you:

  • were entitled to receive JobKeeper for fortnights before 28 September, you have already satisfied the original decline in turnover test
  • are enrolling in JobKeeper for the first time from 28 September 2020, if you satisfy the actual decline in turnover test, you will also satisfy the original decline in turnover test (except for certain universities). You can enrol on that basis.

Unlike calculations for the original decline in turnover test, you do not use your projected GST turnover for the relevant quarter being tested. You use your current GST turnover.

To work out which supplies you have made in the turnover test period, you must use the accounting basis you used for GST reporting purposes. Depending on your circumstances, you could use a cash basis or a non-cash basis.

The rates of the JobKeeper payment in this extension period are:

  • $1,200 per fortnight (before tax) for Tier One employees (those who work 20 hours or more)
  • $750 per fortnight (before tax) for Tier Two (part-time employees working fewer hours than 20 hours).

The reference date for assessing which employees are eligible for the JobKeeper Payment is now 1 July 2020 with effect from 3 August 2020. The reference period for employees regarding their hours worked to determine their tier of payment will be the two fortnightly pay periods prior to 1 March 2020 or 1 July 2020. The period with the higher number of hours is to be used for employees who were eligible at 1 March 2020.

JobKeeper changes its eligibility again from January 4 2021, through to 28 March 2021. Once again businesses will need to show that actual GST turnover declined in the December 2020 quarter, relative to a comparable period (generally the corresponding quarter in 2019).

From 4 January the payment will again be reduced to $1000 per fortnight for Tier One and $650 per fortnight for Tier Two.

Given the large scale of these changes it is likely that hospitality businesses will be impacted, as will employees. Full details on the changes to the JobKeeper Payment and its eligibility are available on the Australian Taxation Office website.