Government has announced that Jobkeeper payments will continue for six months until 28 March 2021 beyond the legislated finish date of 27 Sep 2020 for eligible businesses.  There are requirements for businesses to demonstrate an actual decline in turnover, not merely an estimate, to be eligible for the extended period and the Jobkeeper payments will now be made at two different rates.  Lower payment rates will apply for employees and business participants that have worked or been engaged in the business for less than 20 hours per week.

We do not expect to see draft legislation until end of August and there will undoubtedly be some fine tuning in relation to eligibility and access.  The information provided below is based on communications by Treasury.

Below is the snapshot of eligibility requirements and reduced rates applicable:

Key Dates

Extension Period 1   – 28 Sep 2020 to 3 Jan 2021          

Extension Period 2   – 4 Jan 2021 to 28 Mar 2021

Eligibility – Turnover Tests

The applicable rate of decline in turnover is in accordance with the existing rules (50% for entities with an aggregated turnover of more than $1 billion, 30% for entities with an aggregated turnover of $1 billion or less).

In order to be eligible for Jobkeeper payments during the extension period 1 from 28 September 2020 until 3 January 2021, an entity has to satisfy the below condition:

• actual GST turnover for September 2020 quarter must be at least 30% less than its GST turnover for September 2019 quarter

In order to be eligible for job keeper payments during the extension period 2 from 4 Jan until 28 March 2021, an entity has to satisfy the below condition:

• actual GST turnover for December 2020 quarter must be at least 30% less than its GST turnover for December 2019 quarter

Eligible Employees

Eligibility rules for employees has slightly changed with reference to the relevant date of employment being 1 July 2020 for the extended period instead of 1 March 2020 under the existing Jobkeeper.  Key criteria is as follows:

• the employee was employed by the business as at 1 July 2020;
• the employee is currently employed, was stood down or has been re-hired by the employer;
• the employee is a full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 July 2020) and not a permanent employee of any other employer;
• the employee is either an Australian citizen, Permanent resident, Protected Special Category Visa holder, Non-protected Special Category Visa Holder residing continually in Australia for more than 10 years, Special Category (Subclass 444) Visa Holder as at 1 July 2020
• employee is 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)
• the employee is not receiving any other Jobkeeper payment

Apprentices and Trainees

• Wage subsidy of 50% of the apprentice or trainee’s wages paid continue until 31 March 2021.
• Medium sized businesses employing 199 people or fewer will now be eligible for the 50% subsidy for wages paid from 1 July 2020 to 31 March 2021 for apprentices or trainees who have been in-training with the business as of 1 July 2020.

The above subsidy will be subject to $7,000 per quarter cap.

Payment Rates

Employees and business participants will be eligible for full and reduced rates as mentioned below depending on their working hours or active engagement in the business during the four weeks of pay periods before 1 March 2020 or 1 July 2020. The period with the higher number of hours is to be used for employees who were eligible at 1 March 2020.

All turnover comparisons are based on actual and quarterly basis instead of the estimates and monthly comparisons under the existing Jobkeeper.

We also note that the Commissioner will set out alternative turnover tests for entities where the 2019 quarterly comparisons outlined are not appropriate and ATO has discretion to apply this alternative test if employee’s hours were not usual during Feb 2020 reference period.

If you still have questions after you have had the opportunity to review the information please do not hesitate to contact us.

Written for you by Aarthy Kumar