The federal government recently announced an extension to and some changes to the JobKeeper payment, see our summary below. The extension is for another six months until March 2021.
The existing JobKeeper payment remains unchanged until 27th September 2020. If you would like information on the current payments, please see our blog here.
These are the changes for businesses, including sole traders, and not for profits as of 28th September 2020:
- Several changes to the JobKeeper payment
- The payment rate is lowered
- Two tiers of payment based on employee hours
- The date of employment has moved
- Demonstrate decline in turnover
JOBKEEPER PAYMENT
The current rate of $1,500 per fortnight per eligible employees will be reduced to $1,200 per fortnight. This will change again on 4th January 2021 when the rate will be further reduced to $1,000 per fortnight.
The above applies to employees who were working, on average, 20 hours per week in the four weeks (of pay periods) before either 1st March or 1st July. The business must also have been actively operating for 20 hours per more or week, on average.
For employees who did not average 20 hours per week, the rate of payment will be $750 per fortnight, reducing to $650 per fortnight from 4th January 2021.
Employers will need to nominate which rate they are claiming for, and some exceptions will be made i.e. if the employee was on annual leave and didn’t complete their regular 20 or more hours.
Payments will be made in arrears (as per the current payments) and employers are still required to make payments to employees equal to, or greater than, the pre-tax amount of the JobKeeper payment.
Employees are eligible if they are:
- currently employed by an eligible employer (including if you were stood down or rehired)
- were a full-time, part-time or fixed-term employee at 1 July 2020; or a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer.
- were aged 18 years or older at 1 July 2020 (if you were 16 or 17 you can also qualify if you are independent or not undertaking full time study).
Employees must also be an Australian resident or resident for tax purposes and cannot have received Paid Parental Leave or compensation payments during the JobKeeper payment fortnight.
DEMONSTRATION OF A DECLINE IN TURNOVER
Businesses and not for profits will now need to prove they have had a reduction in turnover during the two periods of extension. These are the September quarter (July, August, September) and the December quarter (October, November, December). The comparison should be made against a comparable period, usually the relative 2019 quarter.
For both periods, businesses will need to demonstrate that their actual GST turnover has fallen in the quarter you are claiming for. Some discretion is available if there are circumstances where comparing last year to this year is not a fair representation.
The assessment for eligibility is expected to be made by using Business Activity Statements (BAS), alternative arrangements will be available for those who do not have to submit a BAS such as not for profits.
To be eligible for payment of JobKeeper, businesses and not for profits need to demonstrate the following decline in turnover:
- 50 per cent for those with an aggregated turnover of more than $1 billion
- 30 per cent for those with an aggregated turnover of $1 billion or less; or
- 15 per cent for Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities).
Visit the ATO for further information.
It is very important that you understand that whether the above information is appropriate or not will depend on what your personal circumstances are. Please consider getting professional advice to ensure that any action you take will meet with your objectives, goals, and financial situation.
Disclaimer: Due to the ever-changing landscape of the Australian financial and taxation system, please seek out advice from a professional before taking this advice into consideration. The above information is general in nature and should not be considered as advice.
