23 July 2020
The Government has announced their plan for the extension of the JobKeeper program. The impact on businesses and the economy of the program finishing on the 27th September has been a concern for many, especially with the rise of COVID-19 infections in the eastern states. The changes announced will hopefully assist businesses to prepare for the end of the program and plan their future with some certainty.
- There will be no changes to the JobKeeper payments that businesses are receiving between now and 27 September 2020
- The program has been extended until 28 March 2021
- There will be new eligibility criteria for businesses to access JobKeeper from 28 September 2020
- From 28 September 2020 the JobKeeper payment will become a “two-tiered” payment
No changes to the original JobKeeper
Businesses that have qualified for JobKeeper will continue to receive the payments based on their initial qualification. Businesses will be required to continue to complete the Monthly Business Declarations and to ensure eligibility of employees e.g. not claiming JobKeeper when employees leave their employment. Businesses are also still eligible to enter the program based on the current rules.
The current payment of a flat rate of $1,500 per fortnight per employee will not change before 28 September 2020.
From 28 September 2020
From 28 September 2020, businesses will be required to reassess their eligibility to continue to access JobKeeper. To be eligible, businesses will be required to show an actual reduction in turnover of 30% or more for both the June 2020 quarter and the September 2020 quarter when compared to the same quarters in 2019.
Note the reference to actual results, as opposed to the previous criteria which were based on projected turnover. Furthermore, testing is now only based on quarterly results, as opposed to the previous criteria which allowed testing on either monthly or quarterly periods.
All other eligibility criteria remain the same – e.g. employees were full-time, part-time or a long-term casual employee as at 1 March 2020.
From this date, JobKeeper payment rates will become a two-tiered payment system:
- $1,200 per fortnight for employees or eligible business participants who worked more than 20 hours per week on average in the 4 weeks prior to 1 March 2020 (i.e this is effectively the month of February 2020); or
- $750 per fortnight for all other employees or eligible business participants
From 4 January 2021
From 4 January 2021, businesses will again be required to reassess their eligibility to continue to access JobKeeper to the close of the program on 28 March 2021. To be eligible for this quarter, businesses will be required to show an actual reduction in turnover of 30% or more for the June, September and December quarters. The 30% reduction must be shown in all three quarters to continue to be eligible for JobKeeper from this date.
The JobKeeper payment rates will reduce again at this point:
- $1,000 per fortnight for employees or eligible business participants who worked more than 20 hours per week on average in the 4 weeks prior to 1 March 2020 (i.e this is effectively the month of February 2020); or
- $650 per fortnight for all other employees or eligible business participants
Will my business be eligible for JobKeeper 2.0?
Use the following flow chart to determine if you are eligible:
If you are currently eligible for Jobkeeper payments, you must continue to lodge your Monthly Business Declarations for July, August and September and the current payments will continue.
Overall the announcements are welcome and will help provide businesses with some certainty. With increased testing required for JobKeeper 2.0 it may prove more difficult for businesses to meet the eligibility criteria, as our economy begins to get back to normal. Continue to monitor your turnover against last year’s turnover going forward to ascertain eligibility and therefore access to JobKeeper 2.0 when cash flow planning. As always, i2 Advisory are here to assist in determining your eligibility and ensuring your reporting requirements are met on time.
Should you require any further information, please contact our staff on 8132 6400 or via email on firstname.lastname@example.org.