October 6, 2020
Important points of JobKeeper 2.0.
On 21 July 2020, the Government announced that the JobKeeper Payment scheme will be extended by six months, until 28 March 2021. Further updates were made to the scheme on 7 August 2020 and came into effect from 28 September 2020.
JobKeeper 2.0: key updates
On 21 July 2020, the Government announced that the JobKeeper Payment scheme will be extended by six months, until 28 March 2021. Further updates were made to the scheme on 7 August 2020 and came into effect from 28 September 2020. If you’re an employee, business entity, not-for-profit or business participant, here’s what these changes mean for you.
On 21 July 2020, the Government announced that the JobKeeper Payment scheme will be extended by six months, until 28 March 2021. Further updates were made to the scheme on 7 August 2020 and came into effect from 28 September 2020.
Existing JobKeeper recipients
From 28 September 2020, in order to continue receiving JobKeeper 2.0 on behalf of employees, businesses and not-for-profits will have to reassess the downturn in their actual GST turnover in the June and September quarters. That means businesses will no longer be able to test for eligibility using projected or estimated GST.
The required decline in turnover remains the same:
- 15% for ACNC-registered charities and not-for-profits (excluding schools and universities)
- 30% for those with an aggregated turnover of $1 billion or less
- 50% for those with a turnover of more than $1 billion
In general, businesses will have to assess their eligibility based on the details reported in their BAS. Alternative arrangements will be announced for those not lodging a BAS.
When it is not possible to compare actual turnover in a 2020 quarter with actual turnover in a 2019 quarter, alternative tests may be set. This remains unchanged from JobKeeper 1.0.
On 21 July 2020, the Government announced that the JobKeeper Payment scheme will be extended by six months, until 28 March 2021. Further updates were made to the scheme on 7 August 2020 and came into effect from 28 September 2020.
Adjustments to turnover tests
From 28 September 2020, in order to continue receiving JobKeeper 2.0 on behalf of employees, businesses and not-for-profits will have to reassess the downturn in their actual GST turnover in the June and September quarters. That means businesses will no longer be able to test for eligibility using projected or estimated GST.
The required decline in turnover remains the same:
- 15% for ACNC-registered charities and not-for-profits (excluding schools and universities)
- 30% for those with an aggregated turnover of $1 billion or less
- 50% for those with a turnover of more than $1 billion
In general, businesses will have to assess their eligibility based on the details reported in their BAS. Alternative arrangements will be announced for those not lodging a BAS.
When it is not possible to compare actual turnover in a 2020 quarter with actual turnover in a 2019 quarter, alternative tests may be set. This remains unchanged from JobKeeper 1.0.
On 21 July 2020, the Government announced that the JobKeeper Payment scheme will be extended by six months, until 28 March 2021. Further updates were made to the scheme on 7 August 2020 and came into effect from 28 September 2020.
Wage conditions and employee eligibility
- The wage condition will continue to apply; however, it will now be based on the new tier system outlined below.
- The “one in, all in” principle will continue to apply – employers cannot choose whom they claim JobKeeper for.
- In order to meet the wage condition, businesses and not-for-profits now have an extended deadline of until 31 October 2020 to pay employees for the first two JobKeeper 2.0 fortnights.
On 21 July 2020, the Government announced that the JobKeeper Payment scheme will be extended by six months, until 28 March 2021. Further updates were made to the scheme on 7 August 2020 and came into effect from 28 September 2020.
The two-tiered system
From 28 September, a two-tiered payment system will apply, with lower rates of pay for eligible recipients. Tiers will be determined using the employee’s average weekly work hours in the four weeks of pay period before either 1 March or 1 July 2020.
On 21 July 2020, the Government announced that the JobKeeper Payment scheme will be extended by six months, until 28 March 2021. Further updates were made to the scheme on 7 August 2020 and came into effect from 28 September 2020.
Tier 1 – $1,200 per fortnight (before tax)
The $1,200 rate applies to:
- Eligible employees who worked 80 hours or more during the four weeks before either 1 March 2020 or 1 July 2020
- Eligible business participants who were actively engaged in the business for 80 hours or more in February, and who notify the ATO of this in their business monthly declaration
On 21 July 2020, the Government announced that the JobKeeper Payment scheme will be extended by six months, until 28 March 2021. Further updates were made to the scheme on 7 August 2020 and came into effect from 28 September 2020.
Tier 2 – $750 per fortnight (before tax)
All other eligible employees or business owners will receive a rate of $750 (before tax) per fortnight.
On 21 July 2020, the Government announced that the JobKeeper Payment scheme will be extended by six months, until 28 March 2021. Further updates were made to the scheme on 7 August 2020 and came into effect from 28 September 2020.
Important notes
- Businesses will have to report which payment rate/tier they are claiming for each eligible employee or business participant to the ATO.
- Employers will have to notify their eligible employees of their respective tier and payment rate within seven days of notifying the ATO.
- Payments for eligible religious practitioners will be based on the same two-tiered system as business practitioners (see above).
- If an employee or business participant’s hours were not usual during February 2020 and/or June 2020 (e.g. if they were on leave, volunteering during the bushfires or unemployed), then the ATO has alternative tests that can be used.
- From 4 January 2021, the tier 1 rate will be reduced to $1,000 and the tier 2 rate will be reduced to $650.
