The Government is extending the JobKeeper wage subsidy for eligible businesses (including self-employed) and not-for-profits from the original end date of 27 September 2020 to 28 March 2021. However, JobKeeper 2.0 will have crucial differences from the original JobKeeper scheme. These are:
- an introduction of a two-tier payment rate; and
- additional turnover tests to be eligible for JobKeeper 2.0.
JobKeeper 2.0 will be broken up into two additional periods of eligibility and payment rates:
- The first period operates from 28 September 2020 to 3rd January 2021
- The second period operates from 4 January 2021 to 28 March 2021JobKeeper 2.0 is predicted to cost $16b on top of the $70b spent already on JobKeeper. It is estimated to support 1.4 million workers in the December quarter 2020, and 1 million workers in the March quarter 2021.
JobKeeper 2.0 payment rates
JobKeeper 2.0 will introduce a two-tier payment rate for employees that will recognise the different rates of work of individual employees.
From 28 September 2020 to 3 January 2021:
JobKeeper will decrease to $1,200 a fortnight for those employees who averaged more than 20 hours per week in the four pay periods prior to 1 March, and $750 a fortnight for employees who averaged less than 20 hours per week in the four pay periods prior to 1 March.
From 4 January 2021 to 28 March 2021:
JobKeeper will decrease to $1,000 a fortnight for those employees who averaged more than 20 hours per week in the four pay periods prior to 1 March, and $650 a fortnight for employees who averaged less than 20 hours per week in the four pay periods prior to 1 March.
Eligible organisations include companies, partnerships, trusts, sole traders, not for profits and charities. For organisations to be eligible for JobKeeper 2.0 they need to demonstrate the following decline in turnover (same as existing rule):
- 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).Additional turnover tests
For businesses and not-for-profits to be eligible for the first period of JobKeeper 2.0 in the Demcember quarter 2020, they will need to demonstrate that their actual GST turnover has fallen by 30 per cent or more in the September quarter 2020 compared relatively to the September quarter 2019.
In order to be eligible for the second period of JobKeeper 2.0 in the March quarter 2021, businesses and not-for-profits will again need to demonstrate that their actual GST turnover has fallen by 30 per cent or more in the December quarter 2020 compared relatively to the December quarter 2019.
If a business or not-for-profit does meet the additional turnover test for JobKeeper 2.0, it will not affect their eligibility for the original JobKeeper scheme ending 27 September 2020.
The eligibility rules for employees remain unchanged. This means you are eligible if you:
- 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 July 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 continue to be eligible to receive the JobKeeper Payment where they meet the relevant turnover test, and are not a permanent employee of another employer.
Find Out More About Eligibility, Process, Timing And How To Apply, Click Here.
Click here for Frequently Asked Questions.
Are Sole Traders Who Don’t Have Employees But Pay Themselves A Dividend Included?
Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment, provide that individual’s Tax File Number and provide a declaration as to recent business activity.
People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payments will be made monthly.
Click Here To Access Further Information For Sole Traders.
Alternative eligibility tests
Similar to the current JobKeeper eligibility criteria, the Commissioner of Taxation will continue to 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.
As a result, the Commissioner has determined alternative tests for a fall in turnover for businesses and not-for-profits where the basic test is not relevant.
Circumstances where an alternative test applies:
- The entity commenced business after the relevant comparison period (the business did not exist in that period) but not on or after 1 March 2020.
- The entity acquired or disposed of part of the business after the relevant comparison period (the business is not the same business in that period as it is now).
- The entity undertook a restructure after the relevant comparison period (the business is not the same business in that period as it is now).
- The entity’s turnover substantially increased by
- 50% or more in the 12 months immediately before the applicable turnover test period, or
- 25% or more in the 6 months immediately before the applicable turnover test period, or
- 12.5% or more in the 3 months immediately before the applicable turnover test period.
- The entity was affected by drought or other declared natural disaster during the relevant comparison period.
- The entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period, excluding entities that have cyclical or regular seasonal variance in their turnover, or
- The entity is a sole trader or small partnership where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover.
For further information on alternative testing arrangements and how to apply click here.