JobKeeper 2.0 – Announcement & Changes
Extension of JobKeeper “UPDATED”
The Treasury has announced the following update in relation to the JobKeeper program:
- JobKeeper 1.0 will remain till 27 September 2020 and
- thereafter, JobKeeper 2.0 will continue for a further six months till 28 March 2021.
The changes to JobKeeper are:
- There will be two rates of JobKeeper payments for eligible businesses (including self-employed) and not-for-profits:
1. From 28 September 2020 to 3 January 2021:
- A $1200 payment per fortnight for:
– eligible employees who worked 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and
– eligible business participants who were actively engaged in the business for 20 hours or more per week on average
- A $750 payment per fortnight for other eligible employees and business participants.
2. From 4 January 2021 to 28 March 2021:
- $1000 payment per fortnight for:
– eligible employees who worked 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and
– eligible business participants who were actively engaged in the business for 20 hours or more per week on average
- A$650 per fortnight for other eligible employees and business participants
The JobKeeper payment will be tapered in the December and March quarters to encourage businesses to adjust to the new environment, supporting a gradual transition to economic recovery. The two-tiered payment aims to better align the payment with the incomes of employees before the onset of the COVID-19 pandemic.
- Further changes were announced on 7 August 2020 to adjust the employee reference date for eligibility and make it easier for organisations to access JobKeeper. From 3 August 2020, the relevant date for employment will move from 1 March to 1 July 2020.
- The thresholds for the decline in turnover test will remain the same but now the test must be applied at several points:
– To be eligible for the JobKeeper payments from 28 September 2020 to 3 January 2021, businesses and not-for-profits must satisfy the relevant decline in turnover test for the September quarter 2020 (July, August, September) only based on actual GST turnover.
– To be eligible for the JobKeeper payments from 4 January 2021 to 28 March 2021, businesses and not-for-profits must satisfy the relevant decline in turnover test for the December quarter 2020 (October, November, December) only based on actual GST turnover.
The requirement to reassess the eligibility for the JobKeeper payments over the extension period is to ensure that only the businesses that need the most help will continue to receive the payments.
The JobKeeper payment will remain open to new recipients provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.
The Commissioner of Taxation will have discretion to set alternative tests where an employee’s or business participant’s hours were not usual during the February and/or June 2020 reference period.
The period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility.
Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper payment (before tax), based on the payment rate that applies to each employee (i.e. the wage condition).
The changes are expected to be implemented through amendments to legislation and the legislative instrument, Coronavirus Economic Response Package (Payments and Benefits) Rules 2020.
If you have any questions, please contact your Accountant for further clarification.