JobKeeper has been extended! The extension also known as JobKeeper 2.0 is yet to be legislated, but we’ve summarised below what’s been announced so far including updates introduced last week.
JobKeeper 2.0 is set to kick in from 28th of September 2020 and effective until 28 March 2021, introducing a tiered payment system and additional decline in turnover tests. If your business is currently on Jobkeeper (i.e. JobKeeper 1.0) you will continue to be paid the Jobkeeper payments at the current rate until the 27th of September 2020.
The extension is split into two parts, where eligibility is tested and the payment rates lower as you move through each part. This essentially gives us 3 phases in the JobKeeper since its introduction:
| JobKeeper 1.0 | JobKeeper 2.0 | JobKeeper 2.0 |
| Phase 1 | Phase 2 | Phase 3 |
| 1 March 2020 to 27 September 2021 | 28 September 2020 to 3 January 2021 | 4 January 2021 to 28 March 2021 |
The sections below, steps through the eligibility requirements and payments rates in the newly introduced phases. While the changes summarised below are yet to pass through parliament, we do not expect the final legislation to be too far from the draft.
Business Eligibility
Businesses must satisfy a decline in turnover tests in each phase to receive JobKeeper payments. The test for JobKeeper 1.0 was broad and based on either actual or projected GST turnover. Businesses could also join at any point in time during the 6-month period. With JobKeeper 2.0 however, a business must demonstrate a 30% decline in actual GST turnover in the quarter prior, in comparison to the same period in 2019.
This means, for a business to be eligible in Phase 2, the business must demonstrate their GST turnover for September 2020 quarter has declined by 30% in comparison to September 2019. To be eligible in phase 3, the decline in turnover test must be met again for December 2020 quarter in comparison to December 2019.
| Phase 1 | Phase 2 | Phase 3 | |
| Eligibility | Decline of 30% or more in Actual or Projected turnover in comparison to same period in 2019 | Decline of 30% or more in Actual turnover in comparison to same period in 2019 | Decline of 30% or more in Actual turnover in comparison to same period in 2019 |
| Turnover Test Period | Month (Mar to Sept 2020) or Jun 2020 quarter or Sept 2020 quarter | Sept 2020 Quarter | Dec 2020 Quarter |
Employee Eligibility
An employee’s eligibility to JobKeeper was tested as at 1 March 2020 (i.e. the reference date). Which means an employee as at 1 March 2020, must have among other requirements been employed by you; be a full-time employee or a long-term casual employee; were 18 years or older etc. Effective 3rd August 2020, an employee can be eligible if they meet the requirement as at 1 July 2020. Any employees not previously eligible, may be now eligible under the new reference date for either JobKeeper 1.0 or JobKeeper 2.0.
The reference date will also be relevant when determining the new rate to pay under JobKeeper 2.0, as detailed below.
Payment Rates
JobKeeper 2.0 introduces a lower rate of payment. In addition, the payment rates will be tiered, where eligibility to receive the full amount will be subject to the number of hours worked by the employee or business participant. To receive the full amount, eligible employees (or business participants) must have worked more than 20 hours on average per week in 4 weeks prior to their reference date*. All other eligible employees and business participants will be paid the partial payment rate.
Summarised below is the current and new payment rates for each phase and tier.
| Phase 1 | Phase 2 | Phase 3 | |
|---|---|---|---|
| Eligible employees and business participants who worked on average 20 hours or more per week in 4 weeks prior to their reference date* | $1,500 per fortnight | $1,200 per fortnight | $1,000 per fortnight |
| All other eligible employees and business participants (i.e. worked less than 20 hours a week) | $1,500 per fortnight | $750 per fornight | $650 per fortnight |
Please keep in mind this is an extension to the existing JobKeeper, therefore pre-existing eligibility requirements for the employer and employees not mentioned above will remain the same as JobKeeper 1.0. While, the ATO does not require employers to prove eligibility in all instances, we recommend that appropriate documentation has been made to confirm each requirement is satisfied.
If you have any further questions or would like to discuss your eligibility, please contact your Altitude Adviser.
