Following our earlier emails, we can confirm the government has extended JobKeeper for the periods following 28 September 2020 (i.e. JobKeeper 2.0). However, in comparison with the original JobKeeper scheme, the qualification rules and subsidy amounts have changed.
We provide only a brief explanation of JobKeeper 2.0 in this email (below) as we have linked some detailed information regarding the updated qualification rules and amounts from the National Tax and Accountants Association, which provide greater detail and more in depth information surrounding this.
EXTENSION OF JOBKEEPER
The JobKeeper extension is broken into two separate periods, as follows:
Extension Period 1 – Applies to fortnights that start after 28 September 2020 and end before 4 January 2021. Simply, to qualify, an entity’s actual GST Turnover for the September 2020 quarter must have declined by relevant percentage (likely 30%), compared to the September 2019 quarter.
Extension Period 2 – Applies to fortnights that start after 3 January 2021 and end before 29 March 2021. Simply, to qualify, an entity’s actual GST Turnover for the December 2020 quarter must have declined by relevant percentage (likely 30%), compared to the December 2019 quarter.
Unlike the original JobKeeper scheme, qualification is based on actual turnover for JobKeeper 2.0, not projected turnover. This means, the actual GST turnover for an entity must decline for the September 2020 and/or December 2020 quarter, relative to the same quarter in 2019.
Potentially, an entity/business can still qualify for JobKeeper 2.0 using an “alternative turnover test” if the September or December 2019 quarter is not an appropriate comparison period for a number of reasons (sickness, drought, natural disaster, business restructure etc). If you consider this is a possibility, we suggest you contact our office to discuss this further.
We note, an entity/business that qualified for the original JobKeeper scheme is required to “requalify” to be entitled for the either of the JobKeeper 2.0 extensions. However, an entity/business that did not qualify for the original JobKeeper scheme can still qualify for JobKeeper 2.0. Also, if an entity does not qualify for JobKeeper 2.0 Extension Period 1, it can still qualify for Extension Period 2.
REVISED PAYMENT RATES
Under the original JobKeeper scheme, there was a payment rate of $1,500 for each “eligible employee” per fortnight, regardless of the number of hours worked. However, JobKeeper 2.0 has a 2 tiered payment system, as follows:
Extension Period 1
Higher Rate: $1,200 per fortnight – For employees with 80+ hrs over a 28 day reference period.
Lower Rate: $750 per fortnight – For employees with less than 80 hrs over a 28 day reference period.
Extension Period 2
Higher Rate: $1,000 per fortnight – For employees with 80+ hrs over a 28 day reference period.
Lower Rate: $650 per fortnight – For employees with less than 80 hrs over a 28 day reference period.
Like the original JobKeeper scheme, the “wage condition” must be satisfied before an entity can receive the JobKeeper amount (i.e. the employer must have already paid the employees the fortnightly amount required before the employer can receive the amount for JobKeeper 2.0). For fortnights starting 28 September 2020 and 12 October 2020 only, the ATO has indicated it will allow employers up to 31 October to satisfy this. Effectively, this allows an entity/business some time to assess its eligibility before it pays employees the required JobKeeper amount.
JobKeeper 2.0 is still available in respect of business participants of qualifying entities (i.e. sole traders, companies and trusts). However, the tiered payment systems for employees in relation to hours worked effectively applies.
We hope this provides you with a brief outline of JobKeeper 2.0 for you to consider if your business may be eligible and the potential amount your business may be entitled to. As the rules are quite detailed and therefore you may need further guidance, we have linked some detailed information regarding the updated qualification rules and amounts for further reference and consideration below.
NTAA Reference Papers:
Determining supplies under new actual GST DIT
JK 2.0 – Alternative DIT tests
Extension of JKPs
However, if you require specific advice or you have any other questions relating to this, please do not hesitate to contact our office on 07 5532 4555.
The Lutz Team