On 21 July, the Australian Government announced the extension of the JobKeeper scheme. The will make it available for a further six months until 28 March 2021. The plan for the extension was to target those businesses needing extra support during the ongoing CODIV-19 pandemic.
A press conference on 7 August revealed further changes to the JobKeeper extension.To make it easier for businesses to qualify when it comes into effect on 28 September. Seemingly driven by the ongoing stage 4 lockdown in Victoria, and the ongoing COVID-19 in general, these amendments are a welcome change.
Reduced Fortnightly Payments
Payments received will be at a reduced rate once the extension period commences. This is accompanied by a reduction to the fortnightly amount received a 28 September 2020. A further payment reduction in effect from 4 January 2021.
Two-Tier Payment System
One of the many changes announced by the government is a ‘two-tier’ payment system to be implemented along with payment reduction. How much a person receives on a fortnightly basis now depends on how many hours per week are worked. From 28 September 2020, until 3 January,2021, eligible employees who work an average 20 hours or more in a week will receive $1,200 per fortnight, down from $1,500. Employees working less than the specified 20 hours will receive $750 per fortnight.
Employees working an average 20 hours or more in a week will receive $1000 per fortnight as of 4 January, 2021. Those who work less than 20 hours in an average week will receive $650 per fortnight.
These rates will apply based on the average hours an employee has worked during a specified reference period.
Is Your Business Eligible to Receive JobKeeper?
From 28 September, you need to reassess your business’s JobKeeper eligibility. To do this, you must reference to your actual GST turnover in the September quarter (July/August/September) 2020. To do this you must demonstrate that your business meets the relevant decline in turnover (30%) to be eligible for JobKeeper from 28 September 2020 to 3 January 2021. When the new period begins on 4 January 2021, you will be once again required to demonstrate that your business meets the decline in turnover threshold (30%) in the December quarter (October/November/December) to be eligible to receive JobKeeper until the end of March 2021.
Are my Staff Eligible to Receive JobKeeper?
Employees must fall into one of the following criteria to be eligible to received JobKeeper payments:
- Are currently employed by an eligible employer (including if you were stood down or rehired)
- Employed on the follow basis:
- a full-time, part-time or fixed-term employee at 1 July 2020.
- a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as of 1 July 2020 and not a permanent employee of any other employer.
- Aged 18 years or older on 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 of 1 July 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.
Whether or not staff members are eligible to receive JobKeeper and which tier of payment they will receive is based on average hours worked a week in a specified reference period. To calculate their average hours, the two fortnightly pay periods prior to 1 March 2020 or 1 July 2020 will be used. T determine on which tier an employee falls on, use the period with the higher number of average hours.
Want to Know More?
The ATO have released a helpful fact sheet outlining all of the changes and how they could affect your business.
You can also visit the ATO website for a more indepth look at the JobKeeper Extension.
