The Government has announced the extension of the JobKeeper Payment until 28 March 2021 and is targeting support to those businesses that continue to be significantly impacted by the Coronavirus.

From 28 September 2020, eligibility for the JobKeeper Payment will be based on actual turnover in the relevant periods and the payment will be stepped down and paid at two rates.


How can you be Eligible?

To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:

  • 50 per cent for those with an aggregated turnover of more than $1 billion;
  • 30 per cent for those with an aggregated turnover of $1 billion or less; or
  • 15 per cent for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).

Periods of Turnover Testing

In order to be eligible for the JobKeeper Payment from 28 September 2020, businesses will have to meet a further decline in turnover test for each of the two periods of extension, as well as meeting the other existing eligibility requirements for the JobKeeper Payment.

To be eligible for Jobkeeper payment from 28 September 2020 to 3 January 2021

Businesses will need to demonstrate that their actual GST turnover has fallen in the September quarter 2020 (July, August, September) relative to a comparable period (generally the corresponding quarter in 2019).

To be eligible for the second JobKeeper Payment extension period of 4 January 2021 to 28 March 2021

Businesses and not-for-profits will need to demonstrate that their actual GST turnover has fallen in the December quarter 2020 (October, November, December) relative to a comparable period (generally the corresponding quarters in 2019)

The Commissioner of Taxation will have the 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 JobKeeper Payment rate

From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:

  • $1,200 per fortnight for all eligible employees who were working for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average; and
  •  $750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:

  • $1,000 per fortnight for all eligible employees who were working for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for business participants who were actively engaged in the business for 20 hours or more per week on average; and
  • $650 per fortnight for other eligible employees and business participants.

Who are eligible Employees

Employees are eligible in the extension period if they:

  • are currently employed by an eligible employer (including if you were stood down or rehired)
  • were for the eligible employer (or another entity in their wholly-owned group) either:
    • a full-time, part-time or fixed-term employee at 1 July 2020; or
    • a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer.
  • were aged 18 years or older at 1 July 2020 (if you were 16 or 17 you can also qualify if you are independent or not undertaking full time study).

Were either:

  • an Australian resident (within the meaning of the Social Security Act 1991); or
  • an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020.
  • were not in receipt of any of these payments during the JobKeeper fortnight:
    • government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010; or
    • a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work.

Only one employer can claim the JobKeeper Payment in respect of an employee

The self-employed will be eligible to receive the JobKeeper Payment where they meet the relevant turnover test, and are not a permanent employee of another employer. Employees will continue to receive the JobKeeper Payment through their employer during the period of the extension if they and their employer are eligible and their employer is claiming the JobKeeper Payment. However, the amount of the JobKeeper Payment will change at the rates set out above.


Further Information

Please contact our office if you wish to discuss your personal circumstances and how to meet the eligibility criteria.

The government has announced that the current $1,500 per fortnight JobKeeper payment will continue past 27 September. However, it will be reduced to $1,200 per fortnight from 28 September, and $750 per fortnight for employees working less than 20 hours a week.

From 4 January, the rate will fall to $1,000 per fortnight and $650 for people working less than 20 hours a week.

Full details of the updated JobKeeper program can be found here.


New Eligibility Tests

Businesses looking to remain on JobKeeper beyond 27 September will be required to meet new eligibility tests.

Businesses will still be required to demonstrate the required reduction in turnover i.e. 30 per cent for businesses with turnovers of $1 billion or less, 50 per cent for those with turnover of more than $1 billion, and 15 per cent for ACNC-registered charities.

The current JobKeeper programs requires a business to apply the test for one period (a month or a quarter) prospectively. However, the government will now require businesses to reapply the tests for the June and September quarters to be eligible for JobKeeper beyond September.

In addition, businesses will need to demonstrate that they have met the relevant decline in each of the three quarters ending on 31 December 2020 (June, September and December quarters) to remain eligible for the payment from January 2021 to March 2021.

We will continue to update this post once more details are known.

Please contact your MGI South Queensland advisor should you have any queries.

 

JobKeeper Payments

The Government has now passed legislation to allow the implementation of the JobKeeper payments to employers and other eligible participants.  If eligible, the Government will pay a wage subsidy of $1,500 per eligible employee. The payments will be taxable to the employers and tax-deductible when paid to employees as wages. 

JobKeeper will essentially be based on fortnights between 30 March 2020 to  27 September 2020. Called “Jobkeeper fortnights”

In order to assess if you are eligible you need to work through the following criteria:

  1. Do You Qualify? 

If you are carrying on a business on 1 March 2020, or are a non-profit body that pursued its objectives principally in Australia on 1 March 2020 you will qualify provided: 

a) Your entity satisfies the “decline in turnover test”  at or before the time it qualifies for the job keeper payments.  The relevant thresholds are as follows: 

The decline in projected GST turnover applies to either:

a) A calendar month that ends after 30 March 2020 and before 1 October 2020;or
b) A quarter that starts on 1 April 2020 or 1 July 2020. 

As compared with the corresponding period in 2019. 

GST turnover includes taxable supplies and GST free sales but excludes input taxed supplies. 

You can apply to the ATO for commissioner discretion if you believe this is not an appropriate comparison period. 

Example

Patrick Enterprises assesses its eligibility for JobKeeper payments on 6 April 2020 based on a projected GST turnover for April 2020 of $6 million. It considers that the comparable period is the month of April 2019 for which it had a current GST turnover of $10 million. The April 2020 turnover falls short of the April 2019 turnover by $4 million, which is 40% of the April 2019 turnover. This exceeds the specified percentage, so the decline in turnover test is satisfied.

2. Who are eligible employees? 

An individual is an eligible employee of an entity for a fortnight if on 1 March 2020:

                     (a)  the individual was aged 16 years or over; and

                     (b)  the individual was:

                              (i)  an employee (other than a casual employee) of the entity; or

                             (ii)  a long term casual employee of the entity (with more than 12 months of regular and systematic employment); and

                     (c)  the individual:

                              (i)  was an Australian resident (within the meaning of section 7 of the Social Security Act 1991); or

                             (ii)  was a resident of Australia for the purposes of the Income Tax Assessment Act 1936 and was the holder of a special category visa referred to in the regulations under the Migration Act 1958 as a Subclass 444 (Special Category) visa.

 

An individual is excluded from being an eligible employee of an entity for a fortnight if:

                     (a)  parental leave pay is payable to the individual and the individual’s PPL period overlaps with, or includes, the fortnight; or

                     (b)  at any time during the fortnight, the individual is paid dad and partner pay; or

                     (c)  all of the following apply:

                              (i)  the individual is totally incapacitated for work throughout the fortnight;

                             (ii)  an amount is payable to the individual under, or in accordance with, an Australian workers’ compensation law in respect of the individual’s total incapacity for work;

                            (iii)  the amount is payable in respect of a period that overlaps with, or includes, the fortnight.

You must also notify your employee that you have applied for JobKeeper payments on their behalf within 7 days of informing the ATO.  Attached is a form that both you and your employee needs to sign for ATO records. We also recommend that you get the employee to sign an acknowledgement and confirm they are not receiving JobKeepeer from any other employer. You must notify the ATO if an employee informs you that you are not their primary employer.

You are not required to notify employees who are not eligible, but you can do so if you wish.  Please see the appendix for sample notification and acknowledgement letters.   

As an employer you are also not obligated to participate in the JobKeeper program. 

3. Do you satisfy the wage condition?

An employer satisfies the wages condition for an Individual for a fortnight if the sum of the amounts paid is equal to or exceeds $1,500 in wages, salary, commissions, bonuses or allowances. These amounts must be subject to withholding. 

Employers can elect to top up employees on low incomes to meet the fortnight threshold in order to make the employees eligible.  Employers will not be required to pay super guarantee on the top up amounts. However, you can if you like. 

4. Have you elected to participate?

If you are eligible to participate you need to notify the ATO of your eligible employees and their details before the end of the relevant fortnight.  For the first and second fortnights you will need to notify the ATO prior to the 26 April 2020.   

5. What are my ongoing obligations 

The employer must report its monthly GST turnover and projected turnover for the following month within 7 days of the end of each month. Therefore the first report will be due on the 7th May 2020. 

The ATO will then pay the JobKeeper payment of $1,500 per eligible employee per eligible fortnight not later than 14 days after the end of the calendar month.  Therefore the first payment shall be due around the 14th May 2020.  

6. Am I eligible for the payment as a business owner?

If your business qualifies for the JobKeeper payment you will also be able to nominate one “eligible business participant” per fortnight to receive an additional $1,500.  Eligible business participants cannot be eligible employees of other entities and must be actively engaged in the business conducted by the entity. Eligible business participants must be an individual who is also one of the following:

An entity is not entitled to a JobKeeper payment unless the entity had an ABN on 12 March 2020 and the entity

a) Carried on a business during the 2019 financial year and had lodged its tax return prior to 12 March 2020. Or
b) The entity made a taxable supply between 1 July 2018 and 12 March 2020 and lodge the appropriate activity statement by 12 March 2020. 

7. What if my decline in turnover is not what I thought it would be? 

There is the risk that you might assume your decline in turnover will be more than the relevant thresholds however it is actually less.  If this is the case you might have to pay the JobKeeper payments back to the ATO plus interest. There will be some tolerance if the fall in turnover is slightly less than the relevant decline in turnover percentage. We would urge you to keep records on how you estimated the projected turnover.  

 

Appendix A  – Notify Employee eligible for JobKeeper

Memorandum

To:     All Eligible Employees

Re: JobKeeper Payment 

Date:

______________________________________________________________________________________________________________

The Federal Government has recently introduced legislation confirming a new JobKeeper subsidy. The JobKeeper subsidy is a payment that assists eligible employers impacted by COVID-19 to continue to pay eligible employees.

Eligible employers can claim a payment of $1,500 per fortnight per eligible employee from 30 March 2020, for a maximum period of 6 months.

This memorandum is to confirm that { INSERT COMPANY NAME } will be participating in the JobKeeper scheme. This will allow us to continue to operate our business throughout this crisis, and in turn, keep our employees in jobs as much as possible. 

We have nominated you as an eligible employee under the JobKeeper scheme. This means that {INSERT COMPANY NAME } will receive a payment of $1,500 per fortnight from the Government to subsidise your wages. 

Employees still working

If you are still working, you will be paid your normal wages based on the hours you work. If you typically receive less than $1,500 before tax per fortnight, you will still be paid the full amount of $1,500 per fortnight, before tax. If you typically receive more than $1,500 before tax per fortnight, you will still receive your normal wages. 

Employees on stand down

If you have been stood down, you will be paid $1,500 per fortnight before tax, even if you typically earn less than $1,500 per fortnight. If you typically earn more than $1,500 before tax, you will not be paid over and above the $1,500 JobKeeper payment. 

For more information on the JobKeeper subsidy, please see the Treasury website at https://treasury.gov.au/coronavirus/jobkeeper

If you have any further questions or concerns in relation to this matter, please contact _______ on _________ .

ACKNOWLEDGEMENT

I __________________________________________ (please print name) hereby acknowledge that I have received, read and understand the details confirmed in this memorandum regarding the JobKeeper arrangement, and agree to be an eligible employee for the purposes of the JobKeeper scheme. I also understand that all contents of this letter are private and confidential.

 

Signed: _____________________
Dated: _____________________

 

Appendix B – Notify employee not eligible for JobKeeper Payment

Memorandum

To:     

Re: JobKeeper Payment 

Date:

______________________________________________________________________________________________________________

The Federal Government has recently introduced legislation confirming a new JobKeeper subsidy. The JobKeeper subsidy is a payment that assists eligible employers impacted by COVID-19 to continue to pay eligible employees.

Eligible employers can claim a payment of $1,500 per fortnight per eligible employee from 30 March 2020, for a maximum period of 6 months.

This memorandum is to confirm that { INSERT COMPANY NAME } will be participating in the JobKeeper scheme. This will allow us to continue to operate our business throughout this crisis, and in turn, keep our employees in jobs as much as possible. 

Unfortunately, you do not meet the eligibility criteria for { INSERT COMPANY NAME } to claim the JobKeeper payment to subsidise your wages. We appreciate that this may result in further financial hardship for you and as such we encourage you, if you have not already, to contact Services Australia about your individual circumstances and to discuss whether you would be eligible for JobSeeker payments.  

As the JobKeeper subsidy is available to businesses for a period of six months until 27 September 2020,  

{ INSERT COMPANY NAME } will continue to assess your eligibility for this subsidy and will keep you fully informed of any changes that may affect your eligibility as soon as possible. 

We would like to take the opportunity to thank you for your continued patience and loyalty during this difficult time.

For more information on the JobKeeper subsidy, please see the Treasury website at https://treasury.gov.au/coronavirus/jobkeeper

If you have any further questions or concerns in relation to this matter, please contact __________ on ___________ .

ACKNOWLEDGEMENT

I __________________________________________ (please print name) hereby acknowledge that I have received, read and understand the details confirmed in this memorandum regarding the JobKeeper arrangement. I also understand that all contents of this letter are private and confidential.

 

Signed: _____________________
Dated: _____________________

Appendix C – Employer not participating in JobKeeper Program

Memorandum

To:     All Employees

Re: JobKeeper Payment – Non-Participation

Date:

______________________________________________________________________________________________________________

The Federal Government has recently introduced legislation confirming a new JobKeeper subsidy. The JobKeeper subsidy is a payment that assists eligible employers impacted by COVID-19 to continue to pay eligible employees.

Eligible employers can claim a payment of $1,500 per fortnight per eligible employee from 30 March 2020, for a maximum period of 6 months.

This memorandum is to confirm that whilst our business may be deemed eligible to participate in the scheme, due to the unprecedented and significant cost COVID-19 has had on our operations and subsequent cashflow, we have made the difficult decision to not participate in this scheme at this time. As a result, we will not be receiving the JobKeeper payments from the Government.    

As the JobKeeper subsidy is available to businesses for a period of six months until 27 September 2020, we will notify you if our ability to participate in the subsidy changes. 

We encourage all employees to contact Services Australia about their individual circumstances and to discuss whether they are eligible for JobSeeker payments.  

We would like to take the opportunity to thank you for your continued patience and loyalty during this difficult time.

For more information on the JobKeeper subsidy, please see the Treasury website at https://treasury.gov.au/coronavirus/jobkeeper

If you have any questions or concerns in relation to this matter, please contact ___________ on ____________ . 

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