On 15 September 2020 the JobKeeper 2.0 rules were released. This followed the passing of the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020 which amended various acts to, in part, ensure that the scheme could extend beyond the original sunset date.
The three instruments released on 16 September in the wake of the above legislation were as follows.
- The Coronavirus Economic Response Package (Payments and Benefits) (Timing of Supplies Made and Decline in Turnover Test) Rules 2020 (No. 1)
- The Coronavirus Economic Response Package (Payments and Benefits) Higher Rate Determination 2020, and
- The Coronavirus Economic Response Package (Payments and Benefits) Alternative Reference Period Determination 2020.
All your JobKeeper extension questions will be answered (see below)
The JobKeeper extension rules are, for the most part, in line with the fact sheet released on 7 August 2020 in that:
- Entities already enrolled in JobKeeper 1.0 do not need to re-enrol for JobKeeper 2.0;
- The decline in turnover test will move from “projected GST turnover” v. “actual GST turnover” to “actual GST turnover” v. “actual GST turnover”;
- Businesses and not-for-profits (“businesses”) will need to retest their eligibility with reference to their actual turnover in the September quarter 2020 to be eligible for JobKeeper fortnights 14 to 20 (28 September 2020 to 3 January 2021);
- Businesses are generally expected to assess eligibility based on details reported in the Business Activity Statement (BAS). Alternative arrangements will be put in place for businesses that are not required to lodge a BAS;
- As the deadline to lodge a BAS for the September quarter or month is in late October, and the December quarter or month BAS deadline is in late January for monthly lodgers or late February for quarterly lodgers (or later under tax agent extensions), businesses will need to assess their eligibility for JobKeeper in advance of the BAS deadline. (This is expected to put a great deal of pressure on taxpayers and tax agents as they scramble to complete their turnover results for the September 2020 quarter);
- Businesses and not-for-profits will need to retest their eligibility with reference to their actual turnover in the December quarter 2020 to be eligible for JobKeeper fortnights 21to 26 (4 January 2021 to 28 March 2021);
- The decline in turnover percentages remain unchanged from JobKeeper 1.0, at 15%, 30% and 50% respectively;
- As with JobKeeper 1.0, the Commissioner will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019;
- The wage condition, based on the tier into which the eligible employee or business participant falls (see below), will continue to be required;
- For JobKeeper fortnights 14 and 15, the Commissioner of Taxation has extended until 31 October 2020 the time an entity has to pay employees in order to meet the wage condition, so that entities have time to first confirm their eligibility for the JobKeeper payment (QC 62432).
- Failing to qualify for JobKeeper fortnights 14 to 20 and/or JobKeeper fortnights 21 to 26 does not affect a business’s eligibility for JobKeeper 1.0 where it has previously met and continues to meet the 1.0 eligibility criteria;
- Businesses that did not previously join JobKeeper 1.0 can join JobKeeper 2.0 if they meet the eligibility criteria;
- JobKeeper 2.0 will be a two-tiered payment arrangement based on average hours worked, on an employee-by-employee basis, in the four weeks of pay periods before either 1 March 2020 or 1 July 2020. The payment tiers will be:
|20 hours or more||Less than 20 hours|
|JobKeeper fortnights 14 to 20||$1,200||$750|
|JobKeeper fortnights 21 to 26||$1,000||$650|
- The period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility;
- Payments for eligible business participants and religious practitioners will be based on the same two-tiered payment arrangement, however the hours of active engagement to determine the payment rate will be based on the month of February 2020 only;
- Businesses will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants);
- Employers must notify eligible employees of the payment to which they are eligible, within seven days of notifying the Commissioner;
- The Commissioner will have discretion to set out alternative tests where an employee or business participant’s hours were not usual during the February and/or June 2020 reference periods. For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February or June 2020;
- Guidance will be provided by the ATO where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances the general rules do not cover;
- Other eligibility criteria for employees and eligible business participants will be consistent with the JobKeeper 1.0 rules, bearing in mind the “1 July 2020” amendments (about eligible employees).
All your JobKeeper extension questions will be answered
Helpline queries to Tax & Super Australia regarding the JobKeeper extension will be answered after the webinar that we will conduct on the JobKeeper extension (details and bookings here). Tax & Super Australia will be holding a webinar on this topic on Friday 25 September at 12:30 AEST that will address the changes. The webinar is free of charge for members and $49.95 for non-members. Our Tax Counsel, John Jeffreys, will cover all of the important information and there will be extensive notes available to every attendee plus a recording of the webinar. Note that some of the information concerning the JobKeeper extension is at the time of writing (17 September) yet to be released by the ATO, and that is why we are delaying the webinar until Friday 25 September.