JobKeeper Changes Coming Next Week
What you need to know
Yep, you guessed it…. More JobKeeper!
You may already be aware that the Australian Government recently announced that the JobKeeper program will be extended beyond September so we wanted to give you a rundown of the changes and what you can expect.
Changes to JobKeeper Payment
The changes to the JobKeeper Payment subsidy scheme mean it will continue until 28 March 2021 and the extension of the support scheme will operate in two separate periods:
- Extension 1: 28 September 2020 to 3 January 2021
- Extension 2: 4 January 2021 to 28 March 2021
JobKeeper Payment Extension 1
The tier 1 payment rate of $1,200 per fortnight applies to:
- Employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020
- Eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration.
For any other eligible employees or business participants, the tier 2 payment rate of $750 per fortnight will apply.
JobKeeper Payment Extension 2
For extension 2, payment rates will be further reduced to:
- $1,000 per fortnight for tier 1 employees and business participants
- $650 per fortnight for tier 2 employees and business participants
The ATO website provides further information about the eligibility requirements for the extension 2 periods.
Decline in Turnover Test
Both these extension periods will require satisfaction of an additional actual decline in GST turnover test as follows.
Extension 1 (28/09/2020 – 03/01/2021)
September Quarter (Jul, Aug, Sept) relative to a comparable period (usually same 2019 Q)
Extension 2 (03/01/2021 – 28/03/2021)
December Quarter (Oct, Nov, Dec) relative to a comparable period (usually same 2019 Q)
For further details about the eligibility requirements for the JobKeeper Payment extension 1, please refer to the Australian Taxation Office (ATO) website.
How does this differ from the original JobKeeper Payment test?
- The decline in turnover must be demonstrated for specific quarters only.
- Rather than using projected GST turnover for the relevant quarter being tested, you use your current GST turnover
- You must allocate sales to the relevant quarter in the same way you would report these sales on your BAS if you were registered for GST (i.e. cash or accruals basis)
- If you are not registered for GST, you will work out your turnover using either the GST cash or non-cash basis of accounting.
What you need to do
From 28 September 2020, you are required to:
- Determine your eligibility for the JobKeeper Payment Extension scheme using the actual turnover test for the September quarter
- Determine if you have any new eligible employees that were not previously nominated for JobKeeper and ask them to complete an employee nomination notice
- Work out the Tier 1 or Tier 2 rate of pay that you will be claiming for each eligible employee/eligible business participant
- Notify your eligible employees which payment rate is applicable for them
- Ensure your eligible employees/eligible business participants receive the correct rate of payment per fortnight during each of the JobKeeper Extension periods according to the two tiers of payment
- If you have outstanding Business Activity Statements (BAS), ensure you lodge your BAS for the September 2019 and December 2019 quarters now (or for equivalent months, if you report monthly) so that you don’t hold up your application for the JobKeeper Payment Extension Scheme
From early January 2021, you are required to:
- Determine your eligibility for the JobKeeper Payment Extension scheme using the actual turnover test for the December quarter
- Follow the relevant steps as previous period including re-calculating the amounts of pay and notifying employees
The required decline in GST turnover percentages will remain the same:
- 30% for an aggregated turnover of $1 billion or less
- 50% for an aggregated turnover of more than $1 billion
- 15% for ACNC-registered charities other than universities and schools.
What you do not need to do
If you are already enrolled for the current JobKeeper Payment Scheme for fortnights prior to 28 September 2020, you do NOT need to:
- Re-enrol for the JobKeeper Payment Extension Scheme
- Re-assess eligibility for employees already receiving JobKeeper Payment for the JobKeeper Payment Extension Scheme or ask them to agree to be nominated
- Meet any further requirements if you are claiming for an eligible business participant, other than holding an ABN and declaring assessable income and supplies
The ATO has a useful one-page fact sheet outlining the key changes, but please ask us if you have a question.
Changes to JobKeeper Provisions
The extension to the JobKeeper program also meant changes to JobKeeper Provisions (under the Fair Work Act).
Whilst we won’t go into detail about these changes here (because quite frankly the world of Fair Work and employment law can be complex) you can check out these modifications on the Fair Work Ombudsman website.
If your business is considering implementing these directions, we highly recommend engaging a professional for information and advice about your workplace rights and obligations.
We have an HR Professional Partner on hand so feel free to get in touch if you need some guidance.
Things to consider doing
There’s more to life (and business) than JobKeeper and we believe it is super important to look at the ‘Big Picture’ for your business so that you not just survive but thrive.
Here are a couple of things you could be doing to keep your business moving in the right direction:
- Business Assessment – Conduct an initial review of the position of your business now and for the next short term
- Cashflow – Put in place a high-level plan looking at what is possible for the business going forward
- Workforce – Determine what people the business needs and plan for any changes to the workforce
If you looking for some assistance and support with the above or any other pain points you may be experiencing in your business, please jump on and book a free discovery session with Infinesse.
We would love to chat!
Karla Hourigan – Infinesse
Infinesse has been built on the motto of “Helping Businesses Work Smarter.” We pride ourselves on being at the forefront of modern accounting software and technology that can save you time. We are hospitality and trades experts and can help you choose the systems and tools that you need to grow your business. These solutions allow you to run your business anywhere, anytime. Our speciality is automating pesky tasks so you don’t have to worry and then taking care of the rest. This means you have the time to “work on your business, not in your business” or maybe just take a break with your family.