September 2020
The changes to the JobKeeper Scheme which were originally announced 21 July 2020 and 7 August 2020 have now been legislated.
The changes include:- two extensions to the JobKeeper scheme beyond the former end date of 27 September 2020;
- a two-tier payment rate system;
- eligibility rules for the two payment tiers based on the number of hours worked during the relevant reference period; and
- a requirement to re-test a business’s eligibility each quarter based on a new ‘actual decline in turnover test’.
Extension to the JobKeeper scheme
There will be two extensions to the JobKeeper scheme which was previously due to end Sunday 27 September 2020 as follows:
- Extension 1: Monday 28 September 2020 to Sunday 3 January 2021
- Extension 2: Monday 4 January 2021 to Sunday 28 March 2021
Two Tier Payment System
From 28 September 2020, the payment rate will be split into a Tier 1 rate (i.e. the higher rate) and a Tier 2 rate (i.e. the lower rate). Both Tier 1 and Tier 2 payment rates will be reduced in two tranches as follows:
| Tier 1 Rate | Tier 2 Rate | |
|
Extension 1 (Monday 28 September 2020 to Sunday 3 January 2021) |
$1,200 per fortnight | $750 per fortnight |
|
Extension 2 (Monday 4 January 2021 to Sunday 28 March 2021) |
$1000 per fortnight | $650 per fortnight |
The payment rates apply to all individuals eligible for JobKeeper payments including eligible employees and eligible business participants. The two-tier payment system will apply to each employee based on their total working hours in the applicable ‘reference period’.
Reference to Hours Worked
The Commissioner may also determine that an alternative reference period applies to a specified class of individuals where he considers that the relevant reference period set out above may not be suitable.
| Eligible employee |
Either:
|
| Eligible business participant | The month of February 2020 |
The Commissioner may also determine that an alternative reference period applies to a specified class of individuals where he considers that the relevant reference period set out above may not be suitable.
The payment tiers
The payment tiers will apply as follows:
| Tier 1 rate | Tier 2 rate | |
|
Employees |
Total hours of work, paid leave and paid absence on public holidays in the reference period greater than or equal to 80 hours | Total hours of work, paid leave and paid absence on public holidays in the reference period less than 80 hours |
|
Business participants |
Total number of hours the individual was actively engaged in the business in the reference period greater than or equal to 80 hours |
Total number of hours the individual spent doing activites:
|
To be eligible for the Tier 1 rate:
- an employee only needs to satisfy the 80-hour requirement in respect of one reference period where both reference periods (i.e. pre-1 March 2020 and pre-1 July 2020) apply;
- a business participant must also make a declaration that they had actively engaged in the business for at least 80 hours during the reference period to the entity (or in the case of a sole trader, to the Commissioner); and
- Where the pay cycle for the employee is longer than 28 days, a pro-rata proportion of the total hours of the employee in the pay cycle is to be used.
The actual decline in turnover test
From 28 September business will need to apply a new actual decline in turnover test in addition to the existing decline in turnover test. The key differences to the existing decline in turnover test are that the GST turnover is based on actual instead of projected (i.e. estimated) GST turnover and the test period is a quarter with no option to choose a calendar month.
The new ‘actual decline in turnover test’ will operate as follows:
| Extension 1 | Current GST turnover for the September 2020 quarter | compared to: | Current GST turnover for the September 2019 quarter |
| Extension 2 | Current GST turnover for the December 2020 quarter | compared to: | Current GST turnover for the December 2019 quarter |
If you need further information or advice specific to your circumstances, please get in touch with the team at Cutcher & Neale.
