The future of JobKeeper and JobSeeker

JobKeeper 2.0

The second tranche of the JobKeeper scheme changes the eligibility test for employers and the method and amount paid to employees. 

If your business currently receives JobKeeper, your arrangements will generally remain unchanged until 27 September 2020. From 28 September 2020, employers seeking to claim JobKeeper payments will need to reassess their eligibility and prove an actual decline in turnover.

Eligibility

To continue receiving JobKeeper payments, employers will need to reassess their eligibility with reference to actual GST turnover for the June and September 2020 quarters (for payments between 28 September to 3 January 2021), and again for the June, September and December 2020 quarters (for payments between 4 January 2021 to 28 March 2021). 

Eligible employers

The broad eligibility tests to access JobKeeper remain the same with an extended decline in turnover test. 

1 March 2020 is an absolute date. An employer that had ceased trading, commenced after 1 March 2020, or was not pursuing its objectives in Australia at that date, is not eligible. 

*Additional tests apply from 28 September 2020. 

Additional decline in turnover tests

To receive JobKeeper payments from 28 September 2020, businesses will need to meet the basic eligibility tests and an extended decline in turnover test based on actual GST turnover.  

 
30 March to 27 September 2020
28 September to 3 January 2021
4 January 2021 to 28 March 2021
Decline in turnover
Projected GST turnover for a relevant month or quarter is expected to fall by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.*
Actual GST turnover in the June and September 2020 quarters fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same periods in 2019.
The decline for both of the quarters needs to be met to continue receiving JobKeeper payments.
Actual GST turnover in the June, September and December 2020 quarters fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same periods in 2019. The decline for all three of the quarters needs to be met to continue receiving JobKeeper payments.

 
* Alternative tests potentially apply where a business fails the basic test and does not have a relevant comparison period.
 

Most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility. However, as the BAS deadlines are generally not due until the month after the end of the quarter, eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees. However, the ATO will have discretion to extend the time an entity has to pay employees in order to meet the wage condition. 

Alternative arrangements are expected to be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group). 

Alternative tests

The Commissioner of Taxation will 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, in line with the Commissioner’s existing discretion. 

Eligible employees

Employee eligibility will remain broadly the same but the value of the payment will change from 28 September based on average weekly hours in February 2020. 


*A ‘long term casual employee’ is a person who has been employed by the business on a regular and systematic basis during the period of 12 months that ended on 1 March 2020 (1 March 2019 to 1 March 2020). These are likely to be employees with a recurring work schedule or a reasonable expectation of ongoing work. 

JobKeeper payments

JobKeeper
30 March to 27 September 2020
28 September to 3 January 2021
4 January 2021 to 28 March 2021
Payment
$1,500 per fortnight per employee
  • $1,200 per fortnight per employee or business participant who worked > 20 hours per week
  • $750 per fortnight per employee or business participant working < 20 hours per week
  • $1,000 per fortnight per employee or business participant who worked > 20 hours per week
  • $650 per fortnight per employee or business participant working < 20 hours per week

 

Assessing if an employee has worked 20 hours or more

JobKeeper payments from 28 September 2020 are paid at a lower rate for employees who worked less than 20 hours per week on average in the four weeks of pay periods before 1 March 2020. 

The Commissioner of Taxation will have discretion to set out alternative tests for those situations where an employee’s or business participant’s hours were not usual during February 2020. Also, the ATO will provide guidance on how this will be dealt with when pay periods are not weekly.

Can I keep getting JobKeeper until September?

If your business and your employees passed the original eligibility tests to access JobKeeper, and you have fulfilled your wage requirements, you can continue to claim JobKeeper up until the last JobKeeper fortnight that ends on 27 September 2020.  

ATO assistant commissioner Andrew Watson said in a recent interview, “Once you’re in, you’re in to the end of September. If you meet the eligibility test once, you’re in it for the whole time.” The original eligibility test was a once only test although there are ongoing conditions that need to be satisfied for each JobKeeper fortnight. 

JobSeeker and other support

Coronavirus supplement

The Coronavirus supplement will continue, albeit on a reduced rate of $250 per fortnight (from $550), from 25 September until 31 December 2020 for eligible individuals. 

27 April to 24 September 2020
$550 per fortnight
25 September to 31 December 2020
$250 per fortnight

 
Eligibility remains the same. That is, those receiving: 

The eligibility criteria and some of the tests for access to income support is changing.

Eligibility and access

The expanded eligibility criteria for the Jobseeker Payment and the Youth Allowance Jobseeker will continue to apply until 31 December 2020: 

In addition, if you receive JobSeeker or Youth Allowance payments, the amount you can earn before impacting income support has been increased to $300 per fortnight from 25 September 2020 until 31 December 2020. 

However, a number of restrictions have been reintroduced. 

Reintroduction of assets and partner income tests

From 25 September 2020, the assets test and the Liquid Assets Waiting Period (applies to those with assets such as cash savings worth over $5,500 for singles or $11,000 for singles with children and partnered people) will be reintroduced for access to income support payments. 

In addition, partner income testing will resume from 25 September, albeit with higher thresholds than those pre coronavirus. That is, you will not be eligible for income support if you are not earning an income but your partner earns $3,086.11 per fortnight or $80,238.89 per annum. The partner income test taper rate will increase from 25 cents for every dollar of partner income earned over $996 per fortnight to 27 cents for every dollar of partner income earned over $1,165 per fortnight. 

Reintroduction of job seeking requirements

Job seeking requirements that were suspended from 24 March 2020 have been introduced from 9 June 2020. The mutual obligation requirements include: 

Waiting periods continue to be waived

Some waiting periods for access to income support will continue to be waived until 31 December 2020:


Disclaimer

The Guide contained herein is provided on the understanding that it neither represents nor is intended to be advice or that the authors or distributor is engaged in rendering legal or professional advice.  Whilst every care has been taken in its preparation no person should act specifically on the basis of the material contained herein. If assistance is required, professional advice should be obtained. 

The material contained in this Guide should be used as a guide in conjunction with professional expertise and judgement.  All responsibility for applications of this Guide and for the direct or indirect consequences of decisions based on this Guide rests with the user. 

Knowledge Shop Pty Ltd, STM Accounting Group, directors and authors or any other person involved in the preparation and distribution of this guide, expressly disclaim all and any contractual, tortious or other form of liability to any person in respect of this Guide and any consequences arising from its use by any person in reliance upon the whole or any part of the contents of this guide. 

Copyright © Knowledge Shop Pty Ltd, STM Accounting Group

V1 21 July 2020



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