Morrison-Frydenberg

Extension of JobKeeper

As the COVID-19 pandemic continues to affect employment in Australia, the Government has announced an extension of JobKeeper from 28 September 2020. From this date, the flat rate of JobKeeper will reduce, payment tiers will be introduced and ongoing turnover tests for businesses will be used to determine eligibility.

Legislation is necessary to support this measure with the next sitting of Parliament 24 August 2020.

Rate of JobKeeper

Currently, JobKeeper is a flat rate of $1,500 per fortnight. It will continue to be paid to eligible recipients at this rate until the original end date of 27 September 2020. However, the extension of JobKeeper until 28 March 2021 will have two rates. The new rates will be:

  • From 28 September 2020 – 3 January 2021:
    $1,200 per fortnight for those working 20 hours or more per week (on average)
    $750 per fortnight for those working less than 20 hours per week.
  •  From 4 January to 28 March 2021:
    $1,000 per fortnight for those working 20 hours or more per week (on average)
    $650 per fortnight for those working less than 20 hours per week.

Eligible employees are those who were working in the business in the four weeks before 1 March 2020 (i.e. February 2020). The ATO will be provided discretion on alternative tests to determine an employee’s hours during the test period where the employee may not have been working, such as being on leave due to bushfires. Guidance will also be provided where employees are not paid on a weekly or fortnightly basis. All other criteria to determine the eligibility of an employee is unchanged.

Businesses will need to continue to identify those employees that JobKeeper is being claimed for and this will be extended to nominating the relevant amount which is being claimed for each employee based on hours of work.

Turnover test

Businesses will need to show a continued decline in turnover to be eligible for the extension of the JobKeeper payment. The decline in turnover is:

  • 50% for businesses with aggregated turnover of more than $1 billion
  • 30% for business with aggregated turnover of $1 billion or less, or
  • 15% for Australian charities and not-for-profit commission-registered charities (excluding schools and universities).

The decline in turnover thresholds are unchanged, however, turnover assessment will be specifically measured at two points under the extension.

From 28 September 2020 to 3 January 2021, businesses will need to have a significant fall in actual GST turnover in the June and September 2020 quarters compared to the corresponding quarters in 2019.

From 4 January to 28 March 2021, businesses will need to have a significant fall in actual GST turnover in the June, September and December 2020 quarters compared to the corresponding quarters in 2019.

The ATO will have discretion to provide alternative methods to determined turnover including circumstances where it is not appropriate to compare actual turnover in 2020 with corresponding quarter in 2019. This is consistent with the current discretion provided to the ATO.

We will keep you posted as the changes to JobKeeper are tabled in Parliament (most likely remotely).

As usual, please contact our office if you have any questions.

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