JobKeeper extension period begins - from 28 September 2020.
From 28 September 2020, there are several amendments that business owners need to be aware of, including different tiers of payment that apply over two separate time frames, as well as changed eligibility tests.
Extension Periods
1. JKPs will now be made beyond 27 September 2020 with two separate extensions, being:
2. Whilst employers will generally qualify for JKPs in the same way, it is important to note that they will need to separately satisfy a new Decline in Turnover Test for both Extension Period 1 and Extension Period 2.
You need to re-test to qualify (Business Eligibility Changes)
1. To continue to receive JobKeeper payments, businesses will be required to prove an actual reduction in turnover of 30% (15% ACNC charities) or more for the September 2020 quarter to continue to receive the subsidy from 28 September 2020 to 3 January 2021.
2. Businesses will then be required to again satisfy a reduction in turnover test for the December 2020 quarter to receive the subsidy from 4 January 2021 to 28 March 2021.
3. In addition to satisfying all the other qualifying conditions, the new actual decline in turnover test must be satisfied separately for Extension Period 1 and Extension Period 2.
Importantly, an entity is not excluded from qualifying for the JKP in Extension Period 2 simply because it did not qualify for the JKP in Extension Period 1 (or even where it did not qualify for the original JKP scheme prior to 28 September 2020). In other words, the new additional test for each period is not contingent on a business having qualified for any, or all, of the earlier periods.
Note: All turnover comparisons are made on a quarterly basis, i.e., there are no monthly
Adjustments to employee eligibility
From 3 August 2020, the relevant date of employment (which is used to determine an employee’s eligibility to JKPs) moved from 1 March 2020 to 1 July 2020. This is designed to increase employee eligibility for both the existing JKP scheme, as well as for the new extension periods from 28 September 2020.
New Rates for 28 September 2020 to 3 January 2021
- $1,200 per fortnight – this rate applies to eligible employees and business participants who worked 20 hours or more per week in the reference period.
- $750 per fortnight – this rate applies to employees and business participants who worked less than 20 hours per week in the reference period.
New Rates for 3 January 2021 to 28 March 2021
- $1,000 per fortnight – this rate applies to eligible employees and business participants who worked 20 hours or more per week in the "reference period".
- $650 per fortnight – this rate applies to employees and business participants who worked less than 20 hours per week in the "reference period".
Note: These reference periods effectively cover the last two consecutive fortnightly pay periods (or the last four consecutive weekly pay periods) ending prior to 1 March 2020 or 1 July 2020. Importantly, both reference periods are applicable to all eligible employees, irrespective of whether their eligibility is based on the 1 March 2020 or the 1 July 2020 requirements.
Changes to the FWA concessions for ‘legacy employers’
Recent amendments have extended modified flexibilities under the FWA to legacy employers who are still experiencing at least a 10% decline in turnover. Importantly, these legacy employers will generally only be eligible for the FWA concessions where they have a ‘10% decline in turnover certificate’ issued by a registered tax agent, a BAS agent or a qualified accountant.
What to do next
1. Contact our office for assistance.
2. Finalise the Sept quarterly accounts and review eligibility criteria (decline in turnover test) and applicable payment rates.
3. From 28 September 2020, employers must provide details relating to eligible employees and also the applicable rate for which they are eligible in respect of their employees as part of the information that must be provided to the Commissioner. There will be no requirement to notify the Commissioner a second time for JKPs relating to Extension Period 2 as no further testing of the hours of work is required to determine the rate of payment.
4. In addition, employers must also notify their employees in writing within seven days of advising the Commissioner of the payment rate applicable to the employee.
5. Ensure payment to employees by the wage payment deadline. The payment due date for FN 14 and FN 15 is 31 October 2020 (transitional)
Further comments
Please contact JDG for assistance with navigating the stimulus packages and determining your eligibility for the tax and business measures.
If you have any questions, please contact our office on (08) 7087 2162. |