JobKeeper V2 - Eligibility & New Rates

As you may know the JobKeeper rules are changing from the 28^th of September 2020, the following is a summary of the important changes that you need to know:

• Businesses must re-assess their eligibility for JobKeeper 2.0 from 28 September
• Businesses already enrolled in JobKeeper 1.0 do not need to re-enrol for JobKeeper 2.0
• Employees who received JobKeeper 1.0 do not need to fill out fresh nomination notices for JobKeeper 2.0
• The decline in turnover test is now “actual” GST turnover for the September quarter” v. “actual GST turnover the 2019 September quarter”
• The decline in turnover percentages remain unchanged from JobKeeper 1.0, at 30%
• Businesses are expected to assess eligibility based on details reported in their BAS. Alternative arrangements will be announced for entities not lodging a BAS.
• As with JobKeeper 1.0, the Commissioner will have discretion to set out alternative tests where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019 – you will need to contact our office to discuss if you are relying on the alternative tests.
• The wage condition, based on the tier into which the eligible employee or business participant falls (see below), continues to apply
• JobKeeper 2.0 will be a two-tiered payment arrangement based on average hours worked, on an employee-by-employee basis, in the four weeks of pay periods before either 1 March 2020 or 1 July 2020.
• Tier 1 and Tier 2 level employees are identified as part of the JobKeeper extension process

Tier 1 - $1,200 per fortnight (before tax). This rate applies to:

• eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and
• eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration to that effect.

Tier 2 - $750 per fortnight (before tax). This rate applies to any other eligible employee or business owner.

• Payments for eligible business participants will be based on the same two-tiered payment basis
• An extra reporting requirement will apply. That is, businesses will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants)
• Employers must notify eligible employees of the payment to which they are eligible, within seven days of notifying the ATO
• The ATO has set out alternative tests where an employee or business participant’s hours were not usual during the February and/or June 2020 reference periods. For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February or June 2020.
• From 4 January 2021 the tier 1 rate reduces to $1,000 and the tier 2 rate reduces to $650

 What you need to do:

Step 1

Determine if your business is still eligible

As discussed above you need to compare your business earnings for the September 2020 Quarter against the business earnings for the September 2019 quarter. If the September 2020 quarter is down by 30% or more then the business remains eligible.

If your income is not down by 30% because you have restructured your business, only recently started your business, experienced large growth in the lead up to COVID19 and comparing your turnover to the September 2019 quarter is not reasonable you will need to contact our office to review your situation.

Step 2

Determine employee pay tier (for those businesses that have employees)

For each employee you will need to calculate the hours that they worked in the four weeks before 1 March 2020 and 1 July 2020.

Once the hours have been calculated, if they have worked over 80 hours in either of these periods they will need to be notified and paid $1200 per fortnight for any pay run after the 28^th of September 2020.

If they have worked under 80 hours in both these 4 week blocks then they will need to be notified and paid $750 per fortnight for any pay run after the 28^th of September 2020.

Step 3

Eligible business participants payments – ie sole traders, beneficiaries of trusts, partners in partnerships & directors not receiving a wage

If you are an eligible business participant and your business has suffered a downturn of 30% or more we will claim your payments at the end of the month as normal however your rate of payment is determined by the hours you worked in the four weeks before 1 March 2020 and 1 July 2020.

Therefore if you were working more than 80 hours in the 4 weeks prior to 1 March 2020 or 1 July 2020 then you will be entitled to $1,200 per fortnight, if you worked less than 80 hours you will be entitled to $750 per fortnight.

Once you have calculated the hours you have worked please complete the attached form and keep it as part of your records.

Step 4

Monthly Declaration

At the end of October 2020 you will need to certify your actual turnover and provide projected turnover for next month (as normal) as well as confirming how many employees are on tier 1 payments and how many are on tier 2 payments.

If you have any questions about applying for JobKeeper for September 2020 or for re-applying for the December Quarter, please contact us on 03 9742 3844.