The Government have announced that the JobKeeper Payment would be extended for a further six months- from 28 September 2020 to 28 March 2021- on a scaled-back dual payment basis, with businesses being required to re-assess their eligibility to remain in the scheme.
The ATO is poised to introduce guidance around the JobKeeper extension alternative tests this week after the Treasurer’s rules and the subsequent Commissioner’s determinations were registered last week.
These alternative tests are expected to remain similar to the original tests that cover seven circumstances.
There are two separate extension periods. For each extension period, an additional actual decline in turnover test applies and the rate of the JobKeeper payment is different.
The extension periods are:
- Extension 1 : from 28 September 2020 to 3 January 2021
- Extension 2 : from 4 January 2021 to 28 March 2021
The rate of the JobKeeper payment in each extension period will depend on the number of hours an eligible employee works, or the number of hours an eligible business participant is actively engaged in the business.
It will be split into two rates:
The tier 1 rate applies to:
- eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and
- eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration to that effect.
The tier 2 rate applies to any other eligible employees and eligible business participants.
The rate of the JobKeeper payment is different for each extension period.
JobKeeper Extension 1
period will run from 28 September 2020 to 3 January 2021.
As per the official ATO website, eligibility will depend on the actual decline in turnover test , and whether those applying were eligible for the original decline in turnover test, with some exceptions.
The rates of the JobKeeper payment in extension period 1 are:
Tier 1: $1,200 per fortnight (before tax)
Tier 2 : $750 per fortnight (before tax).
The new additional test will be satisfied where the entity’s actual GST turnover has declined by the required percentage (e.g., 30% for entities with an aggregated turnover of $1 billion or less) for the quarter ending 30 September 2020, relative to its September 2019 quarter.
JobKeeper Extension 2
period will run from 4 January 2021 to 28 March 2021.
You will need to show that your actual GST turnover has declined in the December 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019). See the actual decline in turnover test .
You also need to have satisfied the original decline in turnover test, also with exceptions.
You can be eligible for JobKeeper extension 2 even if you were not eligible for JobKeeper extension 1.
Tier 1: $1,000 per fortnight (before tax)
Tier 2: $650 per fortnight (before tax).
The new additional test will be satisfied where the entity’s actual GST turnover has declined by the required percentage for the quarter ending 31 December 2020, relative to its December 2019 quarter.
Businesses: What You Need To Do
From 28 September 2020, you must:
• Work out if the tier 1 or tier 2 rate applies to each of your eligible employees and/or eligible business participants
• Notify the ATO and your eligible employees and/or eligible business participants what payment rate applies to them
• During JobKeeper extension 1 – ensure your eligible employees are paid at least:
– $1,200 per fortnight for tier 1 employees
– $750 per fortnight for tier 2 employees
• During JobKeeper extension 2 – ensure your eligible employees are paid at least:
– $1,000 per fortnight for tier 1 employees
– $650 per fortnight for tier 2 employees.
If you are registered for GST and have outstanding BAS statements, you should lodge your BAS for the September 2019 and December 2019 quarters as soon as possible to avoid delay.
The JobKeeper scheme will remain open to new participants, provided they meet the eligibility requirements for the relevant period.
For more information, please don’t hesitate to head to ATO website or contact us today to book a meeting with your manager in the week commencing 5 October 2020, once the reporting for the JobKeeper extension 1 is opened.