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JobKeeper Extension One and Two – What you need to know now

*UPDATED 29 September 2020

On 21 July 2020, the Federal Government announced the continuation of the JobKeeper programme. It now remains effective until 28 March 2021. Phase two of JobKeeper will target businesses, including the self-employed, and not-for-profits (NFP) who are still ‘significantly impacted by Coronavirus’. The legislation has now passed, however a legislative instrument was included that made changes to the original terms of the JobKeeper extension. JobKeeper will remain open to new recipients provided they qualify under the existing eligibility requirements. See ATO guidelines. Here’s what you need to know:

Existing JobKeeper

The existing JobKeeper scheme will remain in place until 27 September 2020.

If your business is currently receiving JobKeeper for yourself and your staff, you’ll need to continue to register at the end of each month to receive payments. You’ll also need to continue to estimate your GST turnover when submitting the monthly registration form and advise if there have been any staff changes. There’s no need to retest or requalify for the current JobKeeper payment.

JobKeeper Extension one

From 28 September 2020, only businesses and NFP’s who remain significantly impacted by Coronavirus will be eligible to receive JobKeeper. Businesses will be required to reassess their eligibility using actual GST turnover figures (rather than projected GST turnover) in the September 2020 quarter to continue to receive the benefit.

Only businesses and NFP’s who can demonstrate a decline in GST turnover for the September 2020 quarter will be eligible to receive JobKeeper payments from September 28, 2020, to 3 January 2021.

If you’re already receiving JobKeeper payments your won’t need to enrol in the scheme again, but you will need to register your actual September 20 quarter GST turnover with the ATO. You, or your registered tax or BAS agent, will need to continue to submit a monthly declaration to the ATO between the 1st and fourteenth of each month.

From 28 September, JobKeeper extension one commences with new payment rates (see below). As an employer, you have until the end of October to meet the outlined wage conditions for each of your employees. New payment rates for JobKeeper extension one are as follows:

From 28 September 2020 to 3 January 2021

  • All eligible employees who worked on average more than 20 hours per week in the four weeks before 1 March 2020, will receive $1,200 for each JobKeeper fortnight.
  • Other eligible employees who worked on average less than 20 hours per week in the four weeks before 1 March 2020, will receive $750 per JobKeeper fortnight.

JobKeeper Extension two

From 4 January 2021, businesses and NFP’s will again be required to reassess their eligibility using actual GST turnover figures. Businesses who show a decline in GST turnover for the December 2020 quarter will be eligible to receive the JobKeeper extension.  The final extension period will run from 4 January until 28 March 2021. New payment rates for JobKeeper extension two are as follows:

From 4 January 2021 to 28 March 2021

  • All eligible employees who worked on average more than 20 hours per week in the four weeks before 1 March 2020, will receive $1,000 for each JobKeeper fortnight.
  • Other eligible employees who worked on average less than 20 hours per week in the four weeks before 1 March 2020, will receive $650 per JobKeeper fortnight.

You’ll need to nominate the rate for each of your employees.

There will be a requirement for businesses and NFP’s to nominate which payment rate they intend to claim for each eligible employee (or business participant, e.g., sole trader).

If for any reason, an employee or business participant did not work usual hours during February 2020, then the Commissioner of Taxation will have the discretion to set out alternate tests for the business. For example, an employee was away volunteering or on annual leave.

All payments will continue to be in arrears and employers must continue to make payments to their eligible employees equal to, or greater than, the amount of JobKeeper payment (as per JobKeeper wage conditions). Note that these payments are before tax payments.

From 3 August 2020, you may be able to to nominate new employees for JobKeeper payments. Staff need to have been employed by you from 1 July 2020 and meet all of the other eligibility requirements. View those here.

Continued eligibility decline in turnover rates unchanged.

Eligibility requirements have not been changed and continue to be as follows:

  • Businesses with an aggregated turnover of more than 1 billion dollars need to demonstrate a decline in GST turnover of 50% relative to the comparable period in 2019;
  • Businesses with an aggregated turnover of less than 1 billion dollars need to demonstrate a decline in GST turnover of 30% relative to the comparable period in 2019;
  • Not-for-profit, Commission-registered charities and Australian Charities need to demonstrate a decline in turnover of 15% relative to the comparable period in 2019 (NB: schools and universities are excluded under this condition).

Generally, businesses and NFP’s will be able to assess eligibility based on details reported in their BAS returns (Business Activity Statements). There will be alternate arrangements for entities who are not required to lodge BAS returns.

Due to BAS deadlines currently in place, businesses will need to assess eligibility for JobKeeper in advance of the BAS deadlines to meet the wage conditions for JobKeeper payments (NB: Information correct at the time of publication but may change).

What if my business doesn’t qualify for extension one?

If you’re running a business that drops out of the scheme on 28 September 2020 you might still be eligible to receive payments in JobKeeper extension two. This new measure has been put in place for those businesses suffering setbacks in GST turnover earned during the December quarter.

To determine your ability to receive JobKeeper payments in extension two, you’ll need to check your GST turnover for the December 20 quarter against the comparable period in 2019 and meet the original eligibility criteria.

You can choose to stop receiving JobKeeper payments at any time. To do this, head to the ATO portal and change the status of your employees or business participant to ‘not claiming yet’. You must notify your employees of any changes you make to the JobKeeper entitlements.

Are you still unsure about any of the changes to JobKeeper? If anything in this article needs clarification, reach out to your tax professional or the ATO for guidance and assistance. 

See Treasury guidelines.

You might also be interested in this business article.

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