By Daniel VelichTaxation Principal
14 September 2020
JobKeeper 2.0 was passed by the Senate on Tuesday, 1 September 2020. The JobKeeper payment, which was originally due to run until Sunday, 27 September 2020, will continue to be available to eligible businesses and not-for-profits until Sunday, 28 March 2021. There are some significant changes to the rules. We have broken them down so that you are clear on how they impact you.
What are the changes?
From 28 September 2020, businesses and not-for-profits will be required to re-assess their eligibility for the JobKeeper extension. If the business or not-for-profit does not meet the new eligibility requirements, then the JobKeeper will stop at the end of September (with your last JobKeeper payment being received in early October). For businesses that satisfy the new eligibility requirements, the JobKeeper payment will be reduced and paid at two rates depending on how many hours the employee worked prior to 1 March 2020 or 1 July 2020.
What are the new eligibility requirements?
The eligibility changes, which will apply from 28 September 2020, will now require businesses to show an actual decline in turnover for the September 2020 quarter alone compared to the relevant period.
Likewise, from 4 January 2021, businesses will only need to demonstrate a decline in turnover for the December 2020 quarter, rather than each of the June, September and December quarters.
There is also a change for the start date for employees, with those hired as of 1 July 2020 now eligible for JobKeeper.
The reference period for employees regarding their hours worked to determine their rate of payment will be the two fortnightly pay periods prior to 1 March 2020 or 1 July 2020. The period with the higher number of hours is to be used for employees who were eligible at 1 March 2020.
Extension of JobKeeper provisions in the Fair Work Act
Businesses that qualified for JobKeeper 1.0, but are unable to qualify for JobKeeper 2.0 because they no longer satisfy the decline in turnover test, will still be able to access temporary Fair Work Act provisions for a further six months if they are experiencing a 10 per cent decline in turnover.
These temporary Fair Work Act provisions include being able to reduce employees’ ordinary hours by 40 per cent of the hours they worked before the pandemic struck and give them directions in relation to duties and location of work.
For such businesses to qualify, they will be required to obtain a 10 per cent decline in turnover certificate from a registered tax agent, BAS agent, or a qualified accountant.
However, there will be a carve-out for small businesses with fewer than 15 employees to allow such employers to provide a statutory declaration to attest to the 10 per cent decline.