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JobKeeper Extension

 

In order to negate the economic impact of the second wave that has hit Victoria, the Government announced extensions and changes to JobKeeper.

General Comments

The JobKeeper rule changes do not impact those taxpayers that are eligible to receive JobKeeper under the initial scheme which terminates on 27 September 2020.

On 21 July 2020 and 7 August 2020 the Government announced that JobKeeper will be extended from 27 September 2020 to 28 March 2021.

New eligibility requirements for the extension period apply and employers who are currently eligible to receive JobKeeper cannot assume that they will continue to be eligible after 27 September 2020.

Rule changes

Decline in turnover test (called GST Turnover)

From 28 September 2020 eligibility for JobKeeper will be based on actual September 2020 and December 2020 quarterly GST turnover earned by the employer.  Prior to this, actual GST turnover was purely used for statistics purposes for the Government to track how the economy was doing and did not impact JobKeeper eligibility.

For each quarter (September 2020 and December 2020) employers will need to prove that they have met the decline in GST turnover test in order to be eligible for JobKeeper in the next quarter, ie, September 2020 quarter actual GST turnover applies to the quarter 28 September 2020 to 3 January 2021, and December 2020 quarter actual GST turnover applies to the quarter 4 January 2021 to 28 March 2021.

Employers will still have to prove that they have had a 30% decline in GST turnover for employers with turnover of less than $1billion and that are not a registered charity.

For the September 2020 quarter the 30% decline in GST turnover must arise as compared to the September 2019 quarter.  For the December 2020 quarter the 30% decline in GST turnover must arise as compared to the December 2019 quarter.  The Commissioner of Taxation may use his discretion to allow an employer to chose another comparative period if the employer has been trading for less than 12 months or the suggested comparative period is not indicative of current trading activities as a result of changed trading operations, for example, a significant change in product lines and market.

NB GST turnover will be based on ACTUAL GST turnover and not estimates.  This means that employers need to complete and lodge their BAS returns AS SOON AS POSSIBLE after 30 September 2020 and 31 December 2020.  If the employer waits to lodge their BAS on the actual due dates, there is a high likelihood that the Government will no longer deem the employer eligible for JobKeeper payments.

 

Amount to be paid per eligible employees per fortnight

Payments will now consist of 2 tiers per quarter.  The tier that will apply will be determined by the number of hours each eligible employee worked.

From 28 September 2020 the rate per fortnight will be $1,200 or $750 per eligible employee.

From 4 January 2021 the rate per fortnight will be $1,000 or $650 per eligible employee.

However, fewer employees will now be eligible for the employer to use.

 

Employee eligibility

Which employees the employer can use for JobKeeper will now be determined based on hours worked.  Prior to this, hours worked did not impact the $1,500 per fortnight.

The reference date for employee eligibility is now 1 July 2020.  In other words, employees recruited after 1 July 2020 will not be eligible.

There will be two “reference periods”, 1 March 2020 or 1 July 2020.

For those employees that were eligible under the existing scheme (ie they were employed at 1 March 2020), the employer must determine the number of hours worked by each employee in the two fortnightly periods (ie 4 weeks) up to 1 March 2020 and the two fortnightly periods (ie 4 weeks) up to 1 July 2020.  Whichever 4 week period has the highest hours will now apply to those existing scheme employees.  These hours will be used to determine the tier to be paid for these eligible employees.

For employees recruited between 1 March 2020 and 1 July 2020, the employer needs to determine the number of hours worked in the two fortnightly periods (ie 4 weeks) up to 1 July 2020.

For the quarter 28 September 2020 to 3 January 2021, if the average number of hours worked PER WEEK over the relevant 4 week period is equal to or greater than 20 hours per week, then the JobKeeper payment will be $1,200 per fortnight.  If the average number of hours worked PER WEEK over the relevant 4 week period is less than 20 hours per week, then the JobKeeper payment will be $750 per fortnight.

For the quarter 4 January 2021 to 28 March 2021, if the average number of hours worked PER WEEK over the relevant 4 week period is equal to or greater than 20 hours per week, then the JobKeeper payment will be $1,000 per fortnight.  If the average number of hours worked PER WEEK over the relevant 4 week period is less than 20 hours per week, then the JobKeeper payment will be $650 per fortnight.

Considering that the average working week is 38 hours and considering that most enterprise agreements/employment contracts have limits as to how many hours an employee can work over a number of weeks, it is safe to assume that the Government have put in place these restrictions in order to ensure that the JobKeeper payments received will be no greater than $750 or $650 per eligible employee per fortnight.

 

Who is an eligible employee?

Full time, part-time or fixed term as at 1 July 2020.

Long-term casual employed by the employer for at least 12 months on a regular or systematic basis (cannot be a permanent employee of another employer) as at 1 July 2020.

Must be 18 or over at 1 July 2020 (if 16 or 17 at 1 July 2020 then must be independent and NOT studying).

Must be an Australian Resident.

Must be an Australian Resident for tax purposes if a holder of visa Subclass 444 as at 1 March 2020 (New Zealand citizen/permanent resident).

Cannot receive Paid Parental Leave during the JobKeeper fortnight being paid.

Cannot receive payment under workers compensation schemes during the JobKeeper fortnight being paid.

 

Self Employed

Must meet decline in GST turnover test per above.

Cannot be a permanent employee of another employer.

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Published: 10/08/2020 18h32