27 September 2020
As outlined in our eAlert last week, the ATO has released information on the extension of JobKeeper and the changes that will come into effect today (28 September 2020). Please refer to our original eAlert here for further information, including key dates.
On the 22 September 2020, Treasurer Josh Frydenberg released the legislative instrument which outlines the alternative tests for decline in turnover for business entities where there is no appropriate relevant comparison period.
The alternative tests can be used to determine whether an entity has satisfied the actual decline in turnover test for the September 2020 quarter or the December 2020 quarter.
If an entity satisfies the basic test, it does not need to satisfy an alternative test. Also, you only need to satisfy one of the alternative tests listed below even if more than one could apply.
Please be aware that while the alternative decline in turnover tests for JobKeeper 2.0 remain relatively the same, there have been some minor changes made.
Circumstances where an alternative test applies:
- The entity commenced business after the relevant comparison period but not on or after 1 March 2020
- The entity acquired or disposed of part of its business from the start of the relevant comparison period but before the applicable turnover test period (for multiple acquisitions or disposals the requirement to use the period after the last transaction has been removed)
- The entity restructured the whole or part of the entity’s business from the start of the relevant comparison period but before the applicable turnover test (for multiple restructures the requirement to use the period after the last transaction has been removed)
- The entity’s turnover substantially increased by:
- 50% or more in the 12 months immediately before the applicable turnover test period or before 1 March 2020, or
- 25% or more in the 6 months immediately before the applicable turnover test period or before 1 March 2020, or
- 12.5% or more in the 3 months immediately before the applicable turnover test period or before 1 March 2020.
- The entity was affected by drought or other declared natural disaster during the relevant comparison period in 2019
- The entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period or 1 March 2020, excluding entities that have cyclical or regular seasonal variance in their turnover, or
- The entity is a sole trader or small partnership with no employees where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover.
It is important to note that the actual decline in turnover tests only use quarters, the original decline in turnover tests used months or quarters.
For the purposes of the September 2020 actual turnover test, the start of relevant comparison period is 1 July 2019 and the start of the applicable turnover test period is 1 July 2020.
More information on how to apply the alternative tests can be found on the ATO website here or contact your local Boyce Accountant.
18 September 2020
The following changes will apply to JobKeeper fortnights commencing 28 September 2020.
Actual decline in turnover test:
For JobKeeper fortnights from 28 September 2020 you will need to meet an actual decline in turnover test. An actual decline in turnover test will need to be met for each extension period:
- Extension 1: from 28 September 2020 to 3 January 2021
- Extension 2: from 4 January 2021 to 28 March 2021
The actual decline in turnover test is similar to the original decline in turnover test. However:
- It must be done for specific quarters only. For Extension 1 - September 2020 quarter must be compared to the September 2019 quarter. For Extension 2 - December 2020 quarter must be compared to the December 2019 quarter.
- You must use actual sales made in the relevant quarter, not projected sales, when working out your turnover
- You must allocate sales to the relevant quarter in the same way you would report those sales to a particular business activity statement if you were registered for GST.
If you are not eligible for JobKeeper under Extension 1 because you do not satisfy the turnover test, you may still be eligible for JobKeeper under Extension 2 if you satisfy the later turnover test. If the “basic” actual turnover test is not appropriate to your circumstances, an alternative turnover test may be available. Details of the alternative tests are yet to be released by the ATO or Treasury.
Rates of payment
For an employee or eligible business participant to receive the Tier 1 (higher) rate of JobKeeper payments in each extension period they will need to satisfy the 80-hour threshold:
The Tier 1 rate will apply to:
- Eligible employees who worked for 80 hours or more in the four weeks prior to the last day of the pay period that ended 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 2020 and provide a declaration to that effect.
In some circumstances, alternative reference periods may apply for determining the 80 hour threshold (e.g. where the employee was on unpaid emergency leave during the relevant 4 week period).
- Businesses will have to wait until the end of September when they complete their BAS before applying the decline in turnover test for the Extension period 1 (as the test is now based on actual GST turnover).
- For the JobKeeper fortnights stating 28 September and 12 October 2020, the ATO is allowing employers until 31 October to meet the wage condition for employees.
- Monthly business declarations for October (the first two fortnights of the extension) will need to be made by 14 November 2020. If you were eligible for JobKeeper 1.0 you need to tell the ATO whether the Tier 1 (higher) or Tier 2 (lower) payment rate applies to your eligible employees or business participants in the monthly declaration form.
For further information please see the ATO website or contact your local Boyce accountant
18 August 2020
Earlier this month the Federal Government announced a key change to the JobKeeper employee eligibility requirements. From 3 August 2020, workers employed from 1 July 2020 and meet the other eligibility requirements will become eligible for JobKeeper.
The ATO has now released further information on this change, and details of how it will be administered.
Please note that this change to employee eligibility will affect the current JobKeeper scheme as well as the extended JobKeeper scheme (JobKeeper 2.0). The change in employment date to 1 July 2020 does not apply for JobKeeper fortnights that ended before 3 August 2020 (that is, employees must continue to satisfy the 1 March 2020 test to be an eligible employee for JobKeeper fortnights ended before 3 August 2020).
Overview of eligibility requirements from 3 August 2020
An employee is an eligible employee for a JobKeeper fortnight starting on or after 3 August 2020 if they:
- are employed by at any time in the JobKeeper fortnight;
- didn't receive any of these payments during the JobKeeper fortnight:
- government parental leave or Dad and Partner Pay;
- a payment in accordance with Australian workers compensation law for an individual’s total incapacity for work;
- agree to be nominated;
- were either an eligible employee for a JobKeeper fortnight ended before 3 August 2020 using the 1 March test or they meet certain conditions at 1 July 2020 (the 1 July test):
- At 1 July 2020 they were employed as either a:
- non-casual employee; or
- long term casual employee not a permanent employee of any other employer;
- they were 18 years or older (if they were 16 or 17, they can also qualify if they were independent or not studying full time on 1 July 2020); and
- were an Australian resident under the Social Security Act 1991 or a Special Category (Subclass 444) Visa Holder.
- At 1 July 2020 they were employed as either a:
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
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.
22 July 2020
Yesterday, The Prime Minister and Treasurer announced an extension of the JobKeeper and JobSeeker payments as well as changes to the schemes that will take effect after the planned end date in September.
- Jobkeeper “1.0” will continue as planned until 27 September 2020
- Jobkeeper “2.0” will apply for a further 6 months from 28 September 2020 through to 28 March 2021
- The current $1,500 per fortnight subsidy will be reduced from 28 September 2020 with the introduction of a two tiered payment system.
- Access to Jobkeeper 2.0 will depend on satisfying the decline in turnover tests for both the June and September 2020 quarters with the test reapplied for the December 2020 quarter for continued access from 4 January 2021.
The JobKeeper scheme which was originally due to end this September has been extended for a further 6 months for businesses and not for profits that continue to be in financial distress due to COVID-19.
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 1 March 2020 will be assessed. 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 in the month of February 2020.
The Commissioner of Taxation will have the discretion to set out alternative tests where an employee or business participant’s hours were not usual during February 2020.