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JobKeeper 2.0 - Changes to Eligibility Requirements Announced

9 August 2020

In response to the ongoing pandemic and the tougher restrictions in Victoria, the Treasurer has announced changes to the eligibility requirements for JobKeeper 2.0, as well as a change in the relevant date for employment for both the existing scheme as well as JobKeeper 2.0.

Please note that the changes to the decline in turnover tests under JobKeeper 2.0 will not affect JobKeeper 1.0 which will run until 27 September 2020.

Key change to JobKeeper 1.0

Employee test

From 3 August 2020, the relevant date for employment will move from 1 March 2020 to 1 July 2020. This change is intended to increase employee eligibility both under the existing scheme (JobKeeper 1.0) as well as the extension (JobKeeper 2.0).

Under this announced change, employees will be eligible if they:

  • Are currently employed by an eligible employer (including where they were stood down or rehired)
  • Work for the eligible employer (or another entity in their wholly owned group) either: a full-time, part-time or fixed-term employee at 1 July 2020; or a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer.
  • Were aged 18 years or older at 1 July 2020 (if an employee is 16 or 17 they can also qualify if they are independent or not undertaking full time study).

Please note the other employee eligibility requirements around nomination of eligible employer, Australian residency and government payments remain unchanged.

We are awaiting further details of how the ATO will be managing this change at the time of this e-Alert.

Key changes to JobKeeper 2.0

The Federal Government also announced changes to JobKeeper 2.0.

Business turnover test

Under the new guidelines, for a business to access JobKeeper 2.0 they need to show their GST turnover has fallen over one quarter. Under the previous announcement, businesses had to show their GST turnover had fallen over multiple quarters in order to qualify for JobKeeper 2.0.

This now means that from 28 September 2020, businesses and not-for-profits will only be required to assess their eligibility with reference to their actual GST turnover in the September quarter 2020 to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021.

From 4 January 2021, businesses and not-for-profits will need to further reassess their turnover to be eligible for the JobKeeper Payment. They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in the December quarter 2020 to be eligible for the JobKeeper Payment from 4 January 2021 to 28 March 2021.

These changes do not impact on the eligibility of a business to continue to access the JobKeeper scheme through to 27 September 2020. For example, if a business does not meet the turnover test in the extension period this will not result in the business ceasing to be eligible for JobKeeper payments up to 27 September under the current rules.

The Commissioner of Taxation will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019, in line with the Commissioner’s existing discretion.

Payment rate still being reduced under JobKeeper 2.0 

Payments under JobKeeper 2.0 are still planned to be reduced, this includes the lower rate of payment for part-time workers.

From 28 September 2020 to 3 January 2021, JobKeeper payments will be $1,200 a fortnight for eligible full-time workers and eligible business participants. Eligible employees and eligible business participants that worked fewer than 20 hours a week will receive $750 per fortnight.

JobKeeper payments will be further reduced starting on 4 January 2021. From 4 January 2021 to 28 March 2021 eligible fulltime workers and eligible business participants will receive $1,000 a fortnight. Eligible employees and business participants that worked less than 20 hours a week will receive $650 a fortnight.

In order to determine how many hours that an eligible employee has worked, the four weeks for pay periods before either 1 March 2020 or 1 July 2020 will now be assessed (it is proposed that the period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility). Eligible business participants will be entitled to the higher rate where they were actively engaged in the business for 20 hours or more per week on average.

Please note the above information is from the fact sheet that has been released by Treasury outlining the proposed extension of the JobKeeper Payment. Appropriate legislation will need to be enacted, and the ATO will have similar discretionary powers to set out alternative tests for certain eligibility criteria to those powers that the ATO currently in relation to the current JobKeeper Payment Scheme. Therefore, there may be further changes to the measures before they become law and come into effect.

Further information about the JobKeeper extension and the proposed changes can be found on the Treasury’s fact sheet. Click here.

The extension of the JobKeeper scheme, JobKeeper 2.0, was first announced 21 July 2020. Click here to read about this announcement.

We will send more information as it becomes available. Please contact your local Boyce accountant for more information.

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