#222 JobKeeper 2.0 – payment extension explained
30 September 2020
We understand many AMA Victoria members will be preparing for a phased return to “business as usual” albeit restricted over coming months, however some members may continue to be eligible to receive revised JobKeeper payments.
To help you test your eligibility to continue to receive JobKeeper, we explain the revised eligibility tests and relevant dates to assist you to navigate the new rules.
Please contact Bongiorno Group if you would like to discuss your specific circumstances and how the new rules will impact your continuing eligibility to receive JobKeeper payments, either for yourself or members of your team.
The JobKeeper coronavirus wage subsidy has changed, effective 28 September 2020.
As the pandemic has continued to wreak havoc on the economy, the Federal Government has extended JobKeeper through to March 2021, but with different rights and eligibility requirements.
Here’s what's changing:
This new JobKeeper will be $1,200 each fortnight if you work the equivalent of 20 hours a week or more during the reference periods of either February or in June 2020.
If you worked less than 20 hours a week in both reference periods, then you will move to the new part-time rate of $750 each fortnight.
Businesses will need to show a 30 per cent drop in actual GST turnover in the three months to the end of September 2020 compared to the same period last year, the September quarter 2019. This needs to be done before 31 October 2020.
The rate of JobKeeper will remain at current levels for the period 28 September 2020 until 3 January 2021 whereby it will fall again. On 4 January 2021, the full time JobKeeper rate will fall to $1000 per fortnight, while the part-time rate will drop to $650 per fortnight.
Again, businesses will need to demonstrate a drop in revenue in the three months to December 2020 compared to the three months to December 2019 using the same rules as above.
Alternative decline in turnover tests
Two important updates:
- The alternative decline in turnover tests have been released by the ATO Commissioner
- The ATO has provided guidance for individual Business Participants in making declarations about their hours worked.
The ATO has confirmed that the alternative decline in turnover tests are only available where there is no appropriate relevant comparison period for the purposes of satisfying the decline in turnover tests for JobKeeper fortnights starting on or after 28 September. For example, if the business commenced later than 1 July 2019. More examples can be found on the ATO website.
Written declaration by business participant
An individual Business Participant (BP) of a company, trust or partnership needs to make a written declaration of the hours that they were actively engaged in the business in the relevant reference period (generally February 2020 unless you need to use an alternative reference period).
Generally, the ATO has stated that the declaration must contain the following:
- full name
- contact phone number and/or email address
- a statement that the time you spent actively engaged in the business during your reference period was 80 hours or more.
The BP should keep records to show how they came to this conclusion.
There is no prescribed way the declaration must be provided to the entity. The notice can be submitted:
- through internal business process – for example, a business HR portal, or
- by their own form of communication channel – for example, email.
The declaration does not need to be sent to the ATO, but the eligible business entity should keep a copy for their records in order to substantiate their claim.
If the BP was actively engaged in the business for less than 80 hours during the reference period, they do not need to complete the written declaration and the Tier 2 rate will apply.
What about sole traders?
Sole traders need to make that declaration in their monthly declaration form to the ATO.
Key dates to remember
Now: notify your employees about the JobKeeper payment they can expect to receive.
28 September 2020: start paying your eligible employees Tier 1 and Tier 2 JobKeeper rates based on their hours worked.
From 28 September: if using Single Touch Payroll to notify the ATO of eligible employees, provide each eligible employee’s Tier as part of your normal payday reporting. Enrol for the JobKeeper payment if you’re doing so for the first time.
Between 1 – 14 October 2020: complete your October JobKeeper monthly business declarations to receive your reimbursement for the September fortnights.
Between 1 – 31 October 2020: prepare and submit your businesses actual decline in turnover to the ATO.
Before 31 October 2020: ensure you meet the wage condition for all eligible employees included in the JobKeeper scheme for the JobKeeper fortnights starting 28 September 2020 and 12 October 2020.
From 1 November 2020: complete your monthly business declaration and confirm what payment tier you are claiming for each employee.
Jim Tsirtsakis BBus (Acc)
DipFP, CFP® FIPA FFA, CTA, Cert.IV FMB
Director, Bongiorno Group
Phone: (03) 9863 3177