Recently, the Australian Federal Government released new rules on the JobKeeper wage subsidy scheme to effectively extend the scheme for a further six months until 28 March 2021. With new testing requirements and reduced cash payments, the government has dubbed this ‘JobKeeper Version 2’ or the ‘JobKeeper Extension’.
Key points to note:
- The existing JobKeeper rules will continue to apply as originally introduced until 27 September 2020
- The new JobKeeper Extension will apply for an additional 6 months from 28 September 2020 until 28 March 2021
- The current $1,500 per fortnight JobKeeper subsidy is to be reduced with effect from 28 September 2020 under a two tiered approach and also based on average working hours as at 1 March 2020 (see below for further details)
- Under the JobKeeper Extension, the decline in turnover tests will now be based on actual rather than projected turnover (see below for further details).
- The existing JobKeeper and JobKeeper Extension will continue to be available to new participants in the scheme provided they meet the relevant tests. This includes carrying on a business and having eligible employees as at 1 March 2020.
Payments of $1,500 per fortnight to be reduced – the work hours test
Under the JobKeeper Extension, the current $1,500 JobKeeper payment will be reduced under a two tiered approach, and the level of payment will depend on whether the employee or business participant worked at least 20 hours per week (work hours test) prior to 1 March 2020. This can be summarised in the following table:
|JobKeeper extension period||20 or more work hours on average per week||Less than 20 work hours on average per week
|28 September 2020 to 3 January 2021 (first extension period)||$1,200 per fortnight||$750 per fortnight
|4 January 2021 to 28 March 2021 (second extension period)||$1,000 per fortnight||$650 per fortnight
In regard to the table above, the work hours test differs slightly depending on whether the worker is an employee or business participant.
For employees, the work hours test is based on an average of working hours during the four weeks of pay periods before 1 March 2020.
For eligible business participants, the work hours test is based on their average work hours during the month of February 2020 and who were actively involved in the business.
The Commissioner will also have discretion to allow the work hours test to be met where it might have otherwise been failed in certain circumstances (e.g. employee was on leave; not employed during all or part of February 2020 or volunteering during bushfires).
Employees still need to be ‘eligible employees’ to come within the scheme. This includes the current test for long-term casuals.
New turnover test requirements
The JobKeeper Extension has effectively two testing periods to measure decline in turnover:
- 28 September 2020 to 3 January 2021 (first testing period)
- 4 January 2021 to 28 March 2021 (second testing period)
Under the first testing period, businesses must satisfy the decline in turnover test based on actual turnover during the quarters ending June 2020 and September 2020. This is compared to the same period in 2019.
Under the second testing period, businesses must satisfy the decline in turnover test based on actual turnover for the quarters ending June 2020, September 2020 and December 2020. This is compared to the same period in 2019.
The ATO can specify alternative tests.
Bentleys considers that the key steps and timelines that businesses should take note of can be summarised as follows:
- Test employees – Businesses will now need to effectively segregate permanent employees from casuals and apply the 20 hour work test as at 1 March 2020 for the purposes JobKeeper payment rates.
- Turnover test – As the decline in turnover test will now be based on actual rather than projected turnover, it will be important for businesses to ensure their record keeping systems are accurate and up to date for the purposes of applying the decline in turnover tests.
Final comments and further support
It is expected the JobKeeper Extension will be critical to the ongoing support of many businesses and employees particularly if the lockdown restrictions are expected to continue for the remainder of the year and into the next year. It will be important for businesses to be aware their eligibility criteria and speak to their advisor for assistance given the new rules add another level of complexity to navigate through.
For further support on the new changes to JobKeeper, contact your local Bentleys advisor.
We, at Bentleys, are doing everything we can to help businesses come out of this challenging time in good shape.
We will continue to update our COVID-19 resource hub with important developments, so please return soon.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.