Running a business during this pandemic has continued to be tricky (an understatement sorry) for many businesses as they have adjusted to new rules and requirements. One of the most significant supports made available by the Government during this time has been the JobKeeper subsidy. It has really helped with cashflow and supporting employers maintaining connections with their employees.

This week the Government annouced it would extend the JobKeeper payment by a further 6 months past the initial 27 September deadline. This is great news for businesses who need ongoing support.

Note: Nothing changes before the end of September. If you are currently receiving JobKeeper then current rules apply.

JobKeeper 2.0 – How is it different and when does it start?

The second phase of this scheme has been revamped in a couple of significant ways, mainly around eligibility testing and the rates of payments to be made to eligible employees.

The scheme will be extended to eligible businesses (including the self-employed) and not-for-profits from 28 September 2020 to 28 March 2021.

How has eligibility changed?

Under the current program businesses were required to satisfy a decline in turnover test once to become eligible. Once eligible they were able to continue to be part of the program on an ongoing basis regardless of how their business continued to perform. This will change under the second stage of this scheme

Under JobKeeper 2.0 employers will need to retest their decline in turnover to ensure they are able to stay in the scheme. The Government believes these new arrangements will improve the integrity of the program and ensure help is targeted at businesses most impacted by COVID-19.

The decline rates are still the same as under the initial scheme. Businesses will be eligible if:

their business has a turnover of less than $1 billion and their turnover has reduced by more than 30 per cent relative to a comparable period a year ago (the ATO will be providing information about alternate tests where no comparable period is available. It is believed these will be like the alternate tests already in place); or
their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per centre relative to a comparable period a year ago; and
the turnover for Australian Charities and Not-for-profits and registered charities has reduced by more than 15 percent relative to a comparable period.

The new re-testing requirements require business to reassess eligibility for the Oct-Dec 2020 period using actual GST turnover figures for the June and Sept quarters. For the Jan – March 2021, businesses must also have had an actual decline in the Dec 2020 period as well.

This above eligibility information is most commonly going to come from GST turnover reported on Business Activity Statements (BAS). As the deadline to lodge a BAS is often much later than the need to determine eligibility, businesses may need to complete some work to undertake these checks in advance of these deadlines. This way business owners can ensure they meet set wage conditions (which requires staff to be paid in advance of receiving JobKeeper payments). According to Treasury, the ATO may have discretion to extend the time a business has to pay employees in order to meet the wage condition, so that they first have time to confirm their eligibility for ongoing participation in the scheme. The detail around this is still to be confirmed.

What are the New Payment rates?

Under the new scheme the payment rates will be reduced, and a lower payment rate will be introduced for those who work fewer hours. Rates will also be reduced over the six months. See below for a summary.

Period	Employees/Eligible Business Participants working 20 hrs plus a week	Employees/Eligible Business Participants working less than 20 hours a week
28 Sept to 3 Jan	$1,200 gross per fortnight	$750 gross per fortnight
4 Jan to 28 Mar	$1,000 gross per fortnight	$650 gross per fortnight

What employees will be covered?

The eligibility rules for employees remains unchanged. This means staff are eligible if they:

are currently employed (including those stood down or re-hired).
were employed on 1 March 2020.
are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months at 1 March 2020).
were 18 years or older at 1 March 2020 (or if you were 16 or 17 and are independent or not undertaking full time study).
are an Australian resident (within the meaning of the Social Security Act 1991)
an Australian resident for the purposes of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020; and
those not in receipt of a Job Keeper payments from another employer, on government parental leave or Dad and partner pay, or a payment in accordance with Australian workers compensation law for an individual’s total incapacity to work.

Under the new scheme the amount paid to employees will be determined based on a 20-hour work test. This will target payments differently for full time employees compared with others that are part-time and long-term casual. The test will apply to eligible employees by reviewing the four weeks of pay before 1 March 2020 (so basically February) and determining an average of hours worked.

Again, we are waiting on details to become available to guide this test. It is believed the ATO will again have discretion here to set alternate tests where an employee’s or business participant’s hours were not usual during February 2020. For example, this may include when people may have been on leave, volunteering during the bush fires, or not employed for all or part of February 2020.

What do you have to do?

For now, do nothing. Continue on meeting the requirements of the current scheme.

Businesses are currently due to lodge their April – June BAS by the end of July (or later in August if using a BAS or Tax Agent). Once this has been done you will be able to evaluate your actual rate of decline in turnover for the June Quarter. This will help you work out if you are either out of the JobKeeper 2.0 scheme (and hopefully this means that things are starting to return to normal for your business) OR that you could potentially still be eligible (subject to September quarter figures).

If you believe you may continue to be eligible it would be good to start reviewing your eligible employees and applying the 20-hour work test. This will help later to identify how much to continue to pay each employee.

For more detailed information…

More detailed information will continue to be published, especially as Parliament resumes and the associated legislation is debated and passed. More information will also become available as the ATO develops more detailed guidelines. The below sites provide regular and reliable updates.

How can Trade Guardian help?

It is always important to understand the position of your business, but never more so now and for the next few months during this pandemic.

If you need any assistance in getting your bookkeeping up to date, Business Activity Statements prepared and lodged, help with processing payroll or assistance with checking your ongoing eligibility for the JobKeeper scheme please Contact Us.