With the country still reeling from the effects of COVID-19 – most notably its major financial impact on business, as well as contributing to more than 1 million Australians out of work – it’s no surprise that the Morrison Government announced on 22 July that the JobKeeper scheme would be extended.
Additional changes announced in August clarify who is eligible and the new sliding-scale payments, so here’s what you need to know about JobKeeper 2.0.
How will employees be categorised under the new JobKeeper scheme?
The current JobKeeper scheme does not distinguish between whether an employee is full-time, part-time, fixed term, casual or a stood-down worker. Every eligible employee – regardless of how many hours they work – receives the same $1,500 fortnightly payment.
This arrangement ends with JobKeeper 2.0. In its place will be a two-tier payment system that applies to both employees and business participants (a non-employee individual who is actively engaged in the operation of the business).
Both will be eligible for the full JobKeeper rate if they work for – or are actively engaged in – the business for at least 20 hours per week on average. They will be eligible for the partial rate if they work for – or are actively engaged in – the business for fewer than 20 hours per week on average.
How much will JobKeeper payments be from 28 September 2020?
So what are those full and partial payments?
The flat $1,500 fortnightly rate is being scrapped and replaced by a scaled payment system according to payment type and the payment period:
- The first payment period will be from 28 Sep 2020 to 3 January 2021. During this period, those who qualify will receive $1,200 fortnightly (full rate); $750 fortnightly (partial rate).
- The second payment period will be from 4 Jan 2021 to 28 March 2021). During this period, those who qualify will receive $1,000 fortnightly (full rate); $650 fortnightly (partial rate).
Who won’t qualify for JobKeeper? The ‘decline in turnover’ test
Businesses will need to meet new eligibility criteria for their ‘decline in turnover’ test in order to receive JobKeeper payments during the two additional payment periods.
The current JobKeeper scheme allows business owners to use a current calendar month (from March 2020 through September 2020) or the June–September 2020 quarter to compare their projected GST turnover against their current GST turnover.
What JobKeeper 2.0 requires is for you to compare your actual GST turnover for both periods – no more estimates. So, if you plan to apply for the first extension period, you will need to compare your actual GST turnover for the September 2020 quarter against your actual GST turnover for the September 2019 quarter. Similarly, for the second payment period, you will need to compare your actual GST turnover for the December 2020 period against your actual GST turnover for the December 2019 period.
That turnover amount must have dropped by the relevant percentage in order to receive the JobKeeper payment:
- 30% drop for businesses with an aggregated turnover of $1 billion or less;
- 15% drop for charities and not-for-profits (excluding schools and universities);
- 50% drop for businesses with an aggregated turnover above $1 billion.
Why has the JobKeeper program changed so much?
COVID-19 has caused widespread financial devastation right across the country, and the government is not immune. In order to continue supporting the businesses that need assistance while also protecting the livelihood of Australians for years to come, the government has decided to tighten the eligibility criteria.
How do I apply to continue receiving JobKeeper for the extended period?
To continue receiving JobKeeper into the first additional payment period (from 28 September 2020) and the second payment period (from 4 January 2020), you will need to provide evidence that your actual GST turnover has dropped in the relevant quarter for each of the two periods. This decline in turnover test must be met in addition to the existing eligibility criteria for the original JobKeeper payments.
If your business is not currently on JobKeeper but you have seen a significant decline in turnover and wish to take advantage of the scheme, you can still apply. Log into the ATO’s Business Portal using your myGov ID, use the ATO’s online services if you’re a sole trader, or get your registered tax or BAS agent to apply for you.
Who can I reach out to for further guidance?
If you’re unsure whether you will be able to qualify for the new JobKeeper payment periods, you can read the full fact sheet from the Treasury here.
Alternatively, you can contact the ATO or call their support centre on 1800 467 033 to discuss your situation. They will be able to advise whether you are eligible to receive the payments.
If you aren’t sure whether your GST turnover has dropped enough to meet the new requirements, speak to your financial advisor or tax agent immediately.