The Australian Government’s Coronavirus Response Package (JobKeeper Payments):
1. JobKeeper has been extended to 28 March 2021.
2. To qualify for JobKeeper 2.0., businesses must satisfy two separate decline in turnover tests.
a. The original projected GST decline in turnover test comparing the projected turnover to the relevant 2019 period for:
i. Months from March 2020 through to December 2020; or
ii. June 2020 quarter; September 2020 quarter; or December 2020 quarter;
b. The new actual GST decline in turnover test is separated into two extension periods:
i. From 28 September 2020 to 3 January 2021; and
ii. 4 January 2021 to 28 March 2021.
3. The new test means that your business will need to have an actual 30% decline in GST turnover for the September 2020 quarter and / or December 2020 quarter, relative to the actual turnover in the comparable 2019 quarter.
4. A business may be eligible for JobKeeper 2.0 even if they did not participate or qualify for JobKeeper 1.0.
5. A business may be eligible for Extension Period 1 and ineligible for Extension Period 2. A business may also be ineligible for Extension Period 1 but eligible for Extension Period 2.
6. From 28 September 2020 to 3 January 2021, there will a two-tiered payment system.
a. Higher rate $1,200 per fortnight (Tier 1); and
b. Lower rate $750 per fortnight (Tier 2).
7. From 4 January 2021 the two tiered payment summary will change as follows:
a. Higher rate $1,000 per fortnight (Tier 1); and
b. Lower rate $650 per fortnight (Tier 2).
8. To be eligible for the Higher Rate (Tier 1). an employee’s total hours need to be 80 hours or more over a 28 day reference period.
9. If an employee’s hours are less than 80 hours over the applicable reference period, the Lower Rate (Tier 2) will apply.
10. There are two standard reference periods consisting of the 28 day periods ending on the most recent pay cycle per employee before either:
a. 1 March 2020; or
b. 1 July 2020.
11. For Eligible Business Participants (EBP), the tests are different. The determining factor is the hours of active engagement in the entity’s business for the standard reference period for the month of February 2020.
12. For EBP’s to be eligible for the higher rate (Tier 1) of JobKeeper the following must occur:
a. Total hours of active engagement are greater than 80 hours; and
b. A declaration is made in the approved form by the business participant to either the business or the Commissioner that active engagement was 80 hours or more in the relevant reference period.
13. If number 11 cannot be satisfied, then the lower rate (Tier 2) will be available.
14. Notifying the Australian Taxation Office (ATO):
a. From 28 September 2020, employers, and Eligible Business Participants (EBP’s) must notify the ATO of their eligible employees, even if they are currently enrolled in JobKeeper.
b. Employers must also notify their employees in writing within seven days of advising the ATO of the applicable payment rate (Tier 1 or Tier 2).
c. Entities must notify the eligible business participant within seven days of notifying the ATO about whether the higher or the lower rate applies (except for Sole Traders).
d. It is likely that the comparable turnover information for the September 2019 and December 2019 quarters will be prefilled by the ATO where the BAS lodgements are up to date.
If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com
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