JobKeeper 2.0 – Lower Payments Based on Actual Turnover Declines
The Government has decided to extend JobKeeper for a further six months (13 fortnights) from 28 September this year, but eligibility will be based on actual rather than projected turnover declines and the payments will be lower.
Here are the key takeouts:
- The extension is until 28 March 2021
- Only those businesses whose actual GST turnovers in each of the June AND September 2020 quarters have declined by 30% or more (or 50% or more – businesses with a GST turnover of $1 billion or more) compared with the same periods in 2019 will be entitled to JobKeeper in the December 2020 quarter.
- Only those businesses whose actual GST turnovers in each of the June, September AND December 2020 quarters have declined by 30% or more (or 50% or more – businesses with a turnover of $1 billion or more) compared with the same periods in 2019 will be entitled to JobKeeper in the March 2021 quarter.
- The Government has kept the 15% GST turnover decline threshold for charities registered with the ACNC (excluding schools and universities), but once again actual rather than projected turnover will be the test applied in a similar manner to other businesses (see above).
- The JobKeeper payments will be lower and there will now be two tiers:
- For employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average – for the December quarter, $1,200 a fortnight; and for the March 2021 quarter, $1,000 a fortnight
- For other eligible employees (both permanent part-time and casual) - $750 a fortnight for the December 2020 quarter and $650 a fortnight for the March 2021 quarter
- Business participants who are not employees remain eligible on the same basis as employees.
- Employers must pay employees first before they can receive JobKeeper.
The new turnover tests will be harder to fulfill than those applying to JobKeeper 1.0, the version that applies now. Each of the two (or three) quarters to which the turnover test applies must meet the decline in turnover threshold. It will not be possible to take an average of the two or three quarters. Moreover, contrary to the current system, it will not be possible to base your turnover decline on a single month.
In addition, the tests utilise actual GST turnover not projected turnover. In some senses, this is a blessing as it eliminates the arguments many fear will erupt in cases where actual turnover under JobKeeper 1.0 exceeds projected turnover.
One difficulty all employers who remain eligible will face is timing the calculation of their turnover for the September and December 2020 quarters with the payment of staff. Given that BAS deadlines are 28 October and 28 January respectively, the ATO “will have the discretion to extend the time an entity has to pay employees in order to meet the wage condition so that entities have time to first confirm their eligibility for the JobKeeper Payment”.
As far as employees are concerned, the eligibility rules are unchanged. In that regard, remember that the employee must have been on the books as of 1 March 2020 as well as being a current employee for the relevant JobKeeper fortnight. The rules which exclude persons who were not long-term casuals as at 1 March also remain, as do the rules excluding most temporary works who are neither citizens nor permanent residents.
As so much time has passed since JobKeeper started, some will be tempted to apply the long term casual test as at the present time. That isn’t correct. There are two test times: 1 March being the date on which the employee has to meet the basic criteria (including the long term casual test) and the JobKeeper fortnight the subject of the claim and for which the employee must have paid the employee.
In short, as is the case now, employees who join the enterprise after 1 March 2020 are not eligible for JobKeeper regardless of the circumstances. In companies with mobile workforces, this may mean that the number of employees eligible for JobKeeper declines over time.