From 28 September 2020 the JobKeeper payment will have further means tests applied.
Under JobKeeper 2.0
- Businesses that earn less than $1 billion in turnover for the purposes of calculating GST will need to demonstrate their revenue has dropped by at least 30 per cent compared to the same time last year.
- The scheme will be extended across two periods:
- Extension 1 28 September 2020 − 3 January 2021
- Extension 2 4 January 2021 − 28 March 2021
- Two tiers of payments have been introduced, with payments reducing across the two extension periods.
Support for businesses that need it the most
JobKeeper has been one of the most important initiatives the federal government has introduced to support businesses, sole traders and not-for-profits that have suffered a serious drop in their revenue as a result of the pandemic.
Under the first iteration of this scheme businesses and other entities that qualified received $1500 a fortnight for each eligible employee. The idea being this payment would allow qualifying firms to keep staff employed while the business navigated the early part of the pandemic.
This initiative is now being extended. But new rules will apply businesses will need to meet to continue to qualify to receive payments under this scheme. The idea being that businesses whose operations are starting to return to more normal trading conditions won’t require this extra help to stay afloat and keep staff employed. But those who do still need some extra support will be able to receive it. Let’s take a look at the details of the scheme.
Top level changes
The federal government’s JobKeeper program has been extended for eligible businesses to the end of March 2021. But the rules around this initiative have shifted so businesses and not-for-profit organisations will have to prove their income has been significantly affected in the September and December quarters to qualify. The payments will also reduce in increments from October.
Understanding key dates
The first point to understand is JobKeeper has been extended until 28 March 2021 for businesses that can prove their operations have been significantly affected by COVID-19.
The ATO will make an assessment about whether a business qualifies for JobKeeper based on actual turnover for the September 2020 quarter. Businesses with revenue of $1 billion or less will need to demonstrate their turnover on an actual or accruals basis has fallen by at least 30 per cent compared to the September 2019 quarter. For those businesses that do qualify, their revenue will be assessed again at the end of December to see if they still qualify to receive JobKeeper for the remainder of the program up until 28 March 2021.
Businesses that are eligible to receive JobKeeper from September will need to complete a monthly business declaration to remain within the scheme.
Working out which employees are eligible
There are two criteria to work out how many employees for which the business will qualify to receive payments:
- They need to be paid at least $1500 a fortnight before tax until 27 September.
- They need to have worked in the business for 20 hours or more a week on average for four weeks either before 1 March 2020 or before 1 July 2020.
- A group the ATO call ‘eligible business participants’ also qualifies to be included. This includes sole traders with an ABN who meet the other eligibility criteria.
It’s also now possible for a business to nominate a new employee to be included under this scheme.
Understanding the two tier system
From September there will be two different tiers for payment, with each tier reducing for Extension 1 and Extension 2
- Tier one: employees and eligible business participants who worked for 20 hours or more a week on average in the four weeks before either 1 March 2020 or 1 July 2020.
- Tier two: eligible employees who were working in the business for less than 20 hours a week in the reference period.
Extension 1 28 September 2020 − 3 January 2021
Payments will be:
- Tier one: $1200 a fortnight
- Tier two: $750 a fortnight
Extension 2 4 January 2021 − 28 March 2021
Payments will be:
- Tier one: $1000 a fortnight
- Tier two: $650 a fortnight
Making the most of JobKeeper
As you can see, the rules around JobKeeper are complex. So it’s a good idea to work with your accountant and adviser to ensure you are using the right data to work out if you qualify and to make sure that if you do, the government has all the information it needs to make payments to you.
Using QuickBooks Online to record your financial information is one of the best ways to ensure your books are accurate and up-to-date. You can find out how to set up & manage JobKeeper payments here.