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On 21 July 2020, the Federal Government announced the extension of the JobKeeper Wage Subsidy Scheme for a further 6 months, extending the scheme until 28 March 2021 (JobKeeper 2.0). This followed a 3-month Treasury review of the existing Scheme undertaken in June 2020.
Subsequent to their announcement in July 2020, the Federal Government announced further amendments to JobKeeper 2.0 on 7 August 2020 with changes to the employer eligibility and employee eligibility criteria.
This article looks at some of the frequently asked questions in relation to the Government’s recent announcements.
It is important to note that at the time of writing this article the changes announced from the Government have not as yet been legislated and therefore further changes could be made to JobKeeper 2.0 before it is scheduled to commence on 28 September 2020. The responses to these frequently asked questions have been prepared based upon the announcements made by Government and materials produced by Treasury up to 7 August 2020.
EMPLOYER ELIGIBILITY
What changes have been announced in relation to JobKeeper 2.0 ?
The Government has announced that under JobKeeper 2.0 there will be two extension periods in which employers will need to requalify for each of the extension periods. The extension periods are:
The JobKeeper Payment rate will also be reduced under a two-tier payment system, in which the fortnightly JobKeeper payment amount will be determined according to the number of hours worked in the 4 weeks of pay periods before either 1 March 2020 or 1 July 2020 (See JobKeeper Payment FAQ below).
The changes have been made in order to provide financial support to those businesses who continue to be significantly impacted by COVID-19, but in a more targeted manner.
Do the changes announced by the Government for JobKeeper 2.0 affect business eligibility for the current JobKeeper Scheme?
No. If a business currently utilises JobKeeper they will not need to requalify for the current JobKeeper scheme. The current eligibility arrangements remain in place until 27 September 2020.
Businesses will need to requalify to be eligible to participate in JobKeeper 2.0.
What eligibility criteria exists for businesses for JobKeeper 2.0 ?
To be eligible for JobKeeper 2.0 business (including companies, partnerships, trusts, sole traders, partnerships, unincorporated associations and individuals) and not for profits will need to demonstrate that they have satisfied a decline in turnover test. Businesses will need to experience the following decline in turnover (which remains the same percentages as the existing rules):
• 50% or more (in the relevant quarter) for businesses with an aggregated turnover of $1 billion or more (for income tax purposes);
• 30% or more (in the relevant quarter) for businesses with an aggregated turnover of less than $1 billion (for income tax purposes);
• 15% or more (in the relevant quarter) for charities registered with the Australian Charities and Non-for-profits Commission (excluding schools and universities)
Aggregated turnover is an entity’s annual turnover from carrying on a business plus the annual turnover from carrying on a business of any business or individual connected with or affiliated with the entity (whether based in Australia or overseas).
The qualification for each extension period under JobKeeper 2.0, is as follows:
First Requalification Period - From 28 September 2020, businesses and not-for-profits will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in the September quarter 2020 (July, August, September) relative to a comparable period (e.g. corresponding quarter in 2019) to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021.
Second Requalification Period - From 4 January 2021, businesses will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in the December quarter 2020 (October, November, December) relative to a comparable period (e.g. corresponding quarter in 2019) to be eligible for the JobKeeper Payment from 4 January 2021 to 28 March 2021.
What if there are circumstances making it difficult to compare actual turnover?
The Commissioner of Taxation will continue to have discretion to set out alternative tests in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019.
My Business Activity Statement (BAS) for the September quarter is due to be lodged in late October. Do I have to assess eligibility and pay my employees before the BAS deadline?
Treasury has advised that as the deadline to lodge a Business Activity Statement (BAS) for the September quarter is late October, and the December quarter (or month) BAS deadline is in late January for monthly lodgers or late February for quarterly lodgers, business will need to assess their eligibility in advance of the BAS deadline in order to meet the wage condition. The ‘wage condition’ requires employers to pay their eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO.
The Commissioner of Taxation will have discretion to extend the time a business has to pay their employees in order to meet the wage condition, so that they first have time to confirm their eligibility for the JobKeeper Payment.
What if my business is not required to lodge a BAS?
Alternative arrangements will be put in place for businesses and non-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST Group).
EMPLOYEE ELIGIBILITY
Are there any changes to the employee eligibility criteria for JobKeeper 2.0 ?
The relevant date of employment for employee eligibility for JobKeeper 2.0 will move from 1 March 2020 to 1 July 2020. However, the other eligibility criteria (as per the current JobKeeper Scheme) will remain the same.
Employees will be eligible for the JobKeeper 2.0 extension if they:
• were employed by the employer at 1 July 2020;
• are currently employed by an eligible employer (including those stood down or re-hired);
• are full-time or part-time (including fixed term), long-term casuals (casual employees who have been with their employer on a regular and systematic basis for at least the previous 12 months as at 1 July 2020 and not a permanent employee of any other employer) or a sole trader;
• were at least 18 years of age on 1 July 2020 (16 and 17 year old’s can also qualify if they are independent or not undertaking full time study);
• were either:
• were not in receipt of any of these payments during the JobKeeper fortnight:
• are not in receipt of a JobKeeper Payment from another employer.
JOBKEEPER PAYMENT RATE
What changes will be made to the JobKeeper payment rate under JobKeeper 2.0 ?
The current JobKeeper payment rate of $1500 per fortnight will be reduced as follows under JobKeeper 2.0:
First Period - From 28 September 2020 - 3 January 2021, the two payment rates will be:
Second Period - From 4 January 2021 to 28 March 2021, the two payment rates will be:
Where an employee has been eligible for JobKeeper since 1 March 2020, the reference period (February or June 2020) with the highest number of hours worked will be used to determine the JobKeeper Payment Rate.
Will employers be required to nominate the pay rate ?
Yes. Businesses will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants).
What happens if the employee or business participant’s hours were not usual during February 2020 or June 2020 ?
The Commissioner of Taxation will have discretion to set out alternative tests where an employee’s or business participant’s hours were not usual during the February 2020 or June 2020 reference period.
For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February 2020. Guidance will be provided by the ATO where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances the general rules do not cover.
Will the JobKeeper payments under JobKeeper 2.0 continue to be paid in arrears ?
The JobKeeper Payment will continue to be made by the ATO to employers in arrears.
Employers are still 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.
TEMPORARY AMENDMENTS TO FAIR WORK ACT 2009 (CTH)
As part of the legislative changes to the existing JobKeeper Scheme, temporary amendments were made to the Fair Work Act 2009 (Cth) through the introduction of a temporary Part 6-4C of the Fair Work Act. The temporary amendments are automatically repealed on 28 September 2020.
The temporary amendments to the Fair Work Act enable employers to issue JobKeeper enabling directions to employees to:
They also enable employers to make certain requests of an employee to:
And by agreement with the employee, allow for the employer to take double the amount of annual leave at half pay.
At this stage there has been no legislative change to the Fair Work Act extending these temporary amendments beyond 27 September 2020. However, we anticipate that there will be support from both sides of Parliament to have these temporary amendments continue beyond 27 September 2020 for those eligible businesses and employees who are participating in JobKeeper 2.0.
The AHA|SA will continue to provide Members with further information prior to the introduction of JobKeeper 2.0. Members can contact Owen, Didier or Gary for any further information on JobKeeper 2.0.
