On 3 September 2020, Parliament decided to extend the JobKeeper Scheme until 28 March 2021, that was originally due to end on 27 September 2020.
The Treasury released the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No.8) 2020 on 15 September 2020, announcing the greatly anticipated extension eligibility requirements.
Under the extension, businesses need to determine if they qualify for any of the eligible periods in order to receive the JobKeeper payments.
| JobKeeper Eligibility Period |
Actual Decline in Turnover Test |
|
28 September 2020 - 3 January 2021
|
Actual turnover for the September 2020 quarter has declined by the required percentage to the relevant comparison period, generally being the September 2019 quarter.
|
|
4 January 2021 - 28 March 2021
|
Actual turnover for the December 2020 quarter has declined by the required percentage to the relevant comparison period, generally being the December 2019 quarter.
|
The Commissioner has the power to determine an alternative decline in turnover test. These alternative tests were released on 23 September 2020. To read our JobKeeper update on alternative tests - click here.
The required decline in turnover percentages.
- 50% - for businesses with a turnover of more than $1 billion
- 30% - for businesses with a turnover of $1 billion or less
- 15% - charities registered with the Australian Charities and Not-For-Profits Commission (ACNC)
The eligibility requirements for the JobKeeper 2.0 periods do not have to be satisfied consecutively. If a business does not satisfy the actual decline in turnover test for the September quarter the business can still qualify for the December quarter, if there has been the required decline in actual turnover compared to the relevant comparison period. The extension is also open to new recipients provided they meet the original eligibility requirements and the additional turnover tests during the extension period. The 1 March 2020 requirement, that a business was being carried on still stands.
The new rules do not alter the following ineligibility issues.
- Business participants are not eligible where business commenced on or after 1 July 2019 and report GST annually.
- Business participants are not eligible where business commenced on or after 1 January 2020 and report GST quarterly.
- A business was sold to a new entity after 1 March 2020, even though the employees may be eligible as the new entity was not carrying on a business on 1 March 2020 the entity itself is not eligible.
- Restructure of a business such as a rollover after 1 March 2020 has the same consequences as the above point.
As part of the next stage of the JobKeeper scheme, the rates for employees have two tiers and are based on the 80-hour test. The eligible employment dates for employees remain unchanged at 1 March 2020 and 1 July 2020.
The JobKeeper fortnightly payment rate tiers.
| JobKeeper Period |
Tier 1 Rate |
Tier 2 Rate |
| 30 March 2020 - 27 September 2020 |
$1,500 |
N/A |
| 28 September 2020 - 3 January 2021 |
$1,200 |
$750 |
| 4 January 2021 - 28 March 2021 |
$1,000 |
$650 |
The applicable rate will depend on the hours worked by the individual in the applicable reference periods.
|
Individual
|
Reference Period
|
Tier 1 Rate Applies if in the Reference Period
|
|
Eligible Employee
|
28-day period ending at the end of the most recent pay cycle that ended before 1 March 2020 or 1 July 2020.
|
Total hours of work, paid leave and paid absence on public holidays was 80 hours or more.
|
|
Eligible Business Participant
|
February 2020
|
Total number of hours the individual was actively engaged in the business carried on by the entity was 80 hours or more.
|
|
Eligible Religious Practitioner
|
February 2020
|
Total number of hours the individual spent doing activities covered by paragraph 12B(2)(b) was 80 hours or more.
|
Eligible business participant and eligible religious practitioners are required to give the entity a notice to that effect in the approved form.
The business participants and the entity must be able to reasonably demonstrate the basis on which they determined that a business participant was actively engaged in the business for the 80 hours or more in February 2020. The explanatory memorandum highlights situations where it would be unlikely that the business participant would satisfy the 80-hour test.
These being:
- the business participant held a separate full-time job
- the entity has not been active during the reference period
- had all duties and other activities carried out instead by employees
For eligible employees the business must choose the reference period that is the most beneficial to the employee. Once the applicable rate has been determined for 28 September 2020 to 3 January 2021 period, there is no need to reassess the required rates for the 4 January 2021 to 28 March 2021 period. There are alternative reference periods available and alternative test for hours where the hours are not readily ascertainable.
The wage condition deadline for fortnights 14 (28 September - 11 October) and fortnight 15 (12 - 25 October) has been extended to 31 October 2020 to allow businesses time to determine their eligibility and the applicable rates per employee.
If you wish to discuss the new rules in further detail, please contact your trusted Ulton advisor.
Sources
Jobkeeper – Extension date passed -https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6583
Jobkeeper 2.0 eligibility rules Rules - https://www.legislation.gov.au/Details/F2020L01165
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