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JobKeeper 2.0

Article By Miriam George | | Accounting & Tax

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 1.0JobKeeper 2.0JobKeeper 2.0
Phase 1Phase 2 Phase 3
1 March 2020 to 27 September 202128 September 2020 to 3 January 20214 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 1Phase 2Phase 3
EligibilityDecline of 30% or more in Actual or Projected turnover in comparison to same period in 2019Decline of 30% or more in Actual turnover in comparison to same period in 2019Decline of 30% or more in Actual turnover in comparison to same period in 2019
Turnover Test PeriodMonth (Mar to Sept 2020) or Jun 2020 quarter or Sept 2020 quarterSept 2020 QuarterDec 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 1Phase 2Phase 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
* reference date is the date on which an employee is assessed as being eligible for JobKeeper. As detailed above, this can be 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.

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.