Extension of JobKeeper Payment

On 21 July, the Government announced it is extending the JobKeeper Payment until 28 March 2021 and is targeting support to those businesses and not-for-profits which continue to be significantly impacted by the Coronavirus.

From 28 September 2020, eligibility for the JobKeeper Payment will be based on actual turnover in the relevant periods, the payment will be stepped down and paid at two rates.

Further changes were announced on 7 August 2020 to adjust the reference date for employee eligibility and make it easier for organisations to qualify for the JobKeeper Payment extension from 28 September 2020.

Information about the operation of the existing JobKeeper Payment until 27 September 2020 is available on the ATO website.

Key changes announced on 7th August 2020
 

  • Turnover test. To qualify for JobKeeper in the December quarter businesses will now only need to demonstrate a decline in the September quarter. This means that businesses that had experienced a rebound before the stage 4 restrictions won’t be penalised.
  • Employees. Workers employed as at 1 July 2020 will now be eligible for JobKeeper. The reference period for employees to determine their tier of payment will be the 4 week periods prior to either 1 March 2020 or 1 July 2020;

Further details of the extension of JobKeeper Payment are as follows:
 
The New JobKeeper Payment rate
 
From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:
  • $1,200 per fortnight for all eligible employees who were working in the business or notfor-profit for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average; and
  • $750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:
  • $1,000 per fortnight for all eligible employees who were working in the business or notfor-profit for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for business participants who were actively engaged in the business for 20 hours or more per week on average; and
  • $650 per fortnight for other eligible employees and business participants.

Businesses and not-for-profits will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants).

The Commissioner of Taxation will have discretion to set out alternative tests where an employee or business participant’s hours were not usual during the February and/or June 2020 reference period (the period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility). For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February or June 2020.
 
Guidance will be provided by the ATO where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances the general rules do not cover. The JobKeeper Payment will continue to be made by the ATO to employers in arrears. Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper Payment (before tax), based on the payment rate that applies to each employee. This is called the wage condition.
 
Additional turnover tests
 
In order to be eligible for the JobKeeper Payment from 28 September 2020, businesses and not-for-profits will have to meet a further decline in turnover test for each of the two periods of extension, as well as meeting the other existing eligibility requirements for the JobKeeper Payment.

In order to be eligible for the first JobKeeper Payment extension period of 28 September 2020 to 3 January 2021, businesses and not-for-profits will need to demonstrate that their actual GST turnover has fallen in the September quarter 2020 (July, August, September) relative to a comparable period (generally the corresponding quarter in 2019).

In order to be eligible for the second JobKeeper Payment extension period of 4 January 2021 to 28 March 2021, businesses and not-for-profits will need to demonstrate that their actual GST turnover has fallen in the December quarter 2020 (October, November, December) relative to a comparable period (generally the corresponding quarters in 2019).

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
 
To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will need to demonstrate that they have experienced the following decline in turnover (which remains the same percentage as the existing rules):
  • 50 per cent for those with an aggregated turnover of more than $1 billion;
  • 30 per cent for those with an aggregated turnover of $1 billion or less; or
  • 15 per cent for Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities).
 
Employees

Employees are eligible in the extension period if they:
  • are currently employed by an eligible employer (including if you were stood down or rehired)
  • were for the eligible employer (or another entity in their wholly-owned group) either: – a full-time, part-time or fixed-term employee at 1 July 2020; or – a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer.
  • were aged 18 years or older at 1 July 2020 (if you were 16 or 17 you can also qualify if you are independent or not undertaking full time study).
  • were either: – an Australian resident (within the meaning of the Social Security Act 1991); or – an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020.
  • were not in receipt of any of these payments during the JobKeeper fortnight: – government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010; or – a payment in accordance with Australian worker compensation law for an individual's total incapacity for work.

Further Information is available in the JobKeeper Payment extension fact sheet.