Today’s announcement by the government have updated 2 key elements to the JobKeeper program, specifically as it relates to the eligibility for BOTH businesses (change to turnover test for JK 2.0) and also for the dates from which employees are considered to be ‘eligible employees’.

 

Eligibility for Businesses – JobKeeper 2.0

 

Firstly, nothing changes for any eligible businesses who are currently receiving Jobkeeper 1.0. You will continue to receive this until 27th September.

In order to receive JK2.0, the government had previously said that employers will need to reassess their eligibility with reference to actual GST turnover for BOTH the June and September 2020 quarters (for payments between 28 September to 3 January 2021), and again for the June, September and December 2020 quarters (for payments between 4 January 2021 to 28 March 2021).

It appears that these requirements have been substantially relaxed so that you don’t need to qualify for consecutive quarters to continue to qualify through to the end of March 2021.

 

ELIGIBLE EMPLOYERS

 

To receive JobKeeper from 28 September 2020, employers will need to reassess their eligibility with reference to actual GST turnover for the September 2020 quarter (for JobKeeper payments between 28 September to 3 January 2021), and again for December 2020 quarter (for payments between 4 January 2021 to 28 March 2021).

The difference to the previously announced eligibility rules (it appears) is that you can FAIL the turnover test in 1 quarter and then re-enter the JobKeeper scheme in the following quarter. That is, if your September 2020 quarter revenue is not down by 30% or more comparing to the same period in the previous year (in the case of a small business), but then your December 2020 revenue falls by more than 30% comparing to the same period in the previous year, then you will not qualify for JobKeeper 2.0 subsidies in the December 2020 quarter but you will likely qualify for JobKeeper 2.0 subsidies in the Jan-Mar 2021 quarter.

 

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The broad eligibility tests to access JobKeeper remain the same with an extended decline in turnover test.

 

The broad eligibility tests to access JobKeeper remain the same with an extended decline in turnover test.

  • On 1 March 2020, carried on a business in Australia or was a non‑profit body pursuing its objectives principally in Australia; and

    • before the end of the JobKeeper fortnight, it met the decline in turnover test*:

      • >15% decline for an ACNC-registered charity (excluding universities, or schools within the meaning of the GST Act – these entities need to meet the basic turnover test)

      • > 50% decline for large businesses:

        • aggregated turnover for the test period is likely to be $1 billion or more, or aggregated turnover for the previous year to the test period was $1 billion or more (a small business that forms part of a group that is a large business must have a >50% decline in turnover to satisfy the test).

        • >30% decline for all other qualifying entities.

      • And, was not:

        • on 1 March 2020, subject to Major Bank Levy for any quarter ending before this date, a member of a consolidated group and another member of the group had been subject to the levy; or

        • a government body of a particular kind, or a wholly-owned entity of such a body; or

        • at any time in the fortnight, a provisional liquidator or liquidator has been appointed to the business or a trustee in bankruptcy had been appointed to the individual’s property.

1 March 2020 is an absolute date. An employer that had ceased trading, commenced after 1 March 2020, or was not pursuing its objectives in Australia at that date, is not eligible.

 *Additional tests apply from 28 September 2020.

Most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility. However, as the BAS deadlines are generally not due until the month after the end of the quarter, eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees. However, the ATO will have discretion to extend the time an entity has to pay employees in order to meet the wage condition.

Alternative arrangements are expected to be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group).

Most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility. However, as the BAS deadlines are generally not due until the month after the end of the quarter, eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees. However, the ATO will have discretion to extend the time an entity has to pay employees in order to meet the wage condition.

 Alternative arrangements are expected to be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group).

 

Eligible Employees

 

The Government has announced that employee eligibility tests will change from 3 August 2020 onwards.

 Under the current version of the JobKeeper scheme an employee must generally have been employed by the relevant entity on 1 March 2020 to be eligible for JobKeeper payments. Someone employed as a casual on that date also must have been employed on a regular and systematic basis for the 12 month period leading up to 1 March 2020.

 However, these proposed changes mean that employees who were previously ineligible for JobKeeper because they were not employed by the entity on 1 March 2020 may now be able to receive JobKeeper payments if they were employed by the entity on 1 July 2020 and can fulfil all of the other eligibility requirements.

  •  On 1 July 2020 (previously 1 March 2020):

    • Was aged 16 years and over; and

    • If the individual was aged 16 or 17, was either financially independent or was not undertaking full-time study;

    • Was an employee other than a casual, or was a long-term casual*; and

    • Was an Australian resident (under the meaning of the Social Security Act 1991), or a resident for tax purposes and held a Subclass 444 (Special category) visa**.

  • And, at any point during the JobKeeper fortnight:

    • Was an employee of the employer (including employees that have been stood down or rehired); and

    • Was not an excluded employee:

      • An employee receiving parental leave pay or dad and partner pay; or

      • An employee receiving workers compensation payments in relation to total incapacity.

  • And, has provided the JobKeeper Payment Employee Nomination to the employer:

    • Agreeing to be nominated by the employer as an eligible employee under the JobKeeper scheme; and

    • Confirming that they have not agreed to be nominated by another employer; and

    • If they are a long-term casual, they do not have permanent employment with another employer.

*A ‘long term casual employee’ is a person who has been employed by the business on a regular and systematic basis during the period of 12 months that ended on the applicable testing date (previously 1 March 2020, but changing to 1 July 2020). These are likely to be employees with a recurring work schedule or a reasonable expectation of ongoing work.

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Assessing if an employee has worked 20 hours or more

JobKeeper payments from 28 September 2020 are paid at a lower rate for employees who worked less than 20 hours per week on average in the four weeks of pay periods before 1 March 2020 and the four weeks of pay periods before 1 July 2020.

The Commissioner of Taxation will have discretion to set out alternative tests for those situations where an employee’s or business participant’s hours were not usual during February or June 2020. Also, the ATO will provide guidance on how this will be dealt with when pay periods are not weekly. This guidance is not as yet available.

Can I keep getting JobKeeper until September?

If your business and your employees passed the original eligibility tests to access JobKeeper, and you have fulfilled your wage requirements, you can continue to claim JobKeeper up until the last JobKeeper fortnight that ends on 27 September 2020.

ATO Assistant Commissioner Andrew Watson said in a recent interview, “Once you’re in, you’re in to the end of September. If you meet the eligibility test once, you’re in it for the whole time.” The original eligibility test was a once only test although there are ongoing conditions that need to be satisfied for each JobKeeper fortnight.

JobKeeper Fortnights

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