How the new JobKeeper 2.0 rules affect your business
The Australian Government recently announced an extension to the JobKeeper payment scheme – the wage subsidy that helps businesses affected by Covid-19 to retain their employees.
The highly anticipated extension, known as JobKeeper 2.0, will be available to eligible businesses based on a demonstrated decline in turnover. JobKeeper 2.0 will be split into two extension periods, with payments being reduced from 28 September 2020, and then again in January 2021. The JobKeeper payment rates will also differ depending on the eligible employee’s average hours worked, and will be split into Tier 1 and Tier 2 employees.
The minimum wage condition still applies, meaning businesses are not allowed to pay staff a lower hourly rate than they were previously entitled to.
Important JobKeeper 2.0 dates to keep in mind
JobKeeper 2.0 officially starts from 28 September 2020 and ends on 28 March 2021.
There are two separate extension periods:
- 28 September 2020 to 3 January 2021
- 4 January 2021 and 28 March 2021.
If you are not already claiming JobKeeper, you have until 31 October to meet the wage conditions for employees receiving fortnightly payments starting on 28 September and 12 October.
If your business is already enrolled in JobKeeper, you do not need to reapply. Simply check your continuing eligibility and submit any additional information to the ATO between 1–31 October 2020. You will need to indicate which payment tier you intend to claim for each eligible employee.
The deadline to lodge the BAS for the September quarter or month is in late October. This means businesses will need to assess their eligibility for JobKeeper in advance of the BAS deadline in order to meet the wage condition, which requires them to pay eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO.
You will need to complete your monthly declaration between the 1st and 14th of each month to claim JobKeeper payments for the previous month.
Tier 1 rules and payment amounts
Tier 1 applies to eligible employees who worked for 80 hours or more in a 28 day pay period before either 1 March or 1 July 2020, as well as eligible business participants who were actively engaged in the business for 80 hours or more in February 2020.
Inclusions that count toward an eligible employee’s 80 hours are:
- Actual hours worked
- Paid leave (personal or carer’s leave, annual leave, long service leave, paid parental leave)
- Paid public holidays.
Unpaid leave, government funded parental leave, workers’ compensation and stand down are not counted towards an eligible employee’s 80 hours.
During the first extension period, Tier 1 payments will be $1,200 per fortnight per eligible employee or business participant.
During the second extension period, Tier 1 payments will be reduced to $1,000 per fortnight per eligible employee or business participant.
Tier 2 rules and payment amounts
Tier 2 applies to any eligible employee or business participant who worked for less than 80 hours in a 28 day pay period.
During the first extension period, Tier 2 payments will be $750 per fortnight per eligible employee or business participant.
During the second extension period, Tier 2 payments will be reduced to $650 per fortnight per eligible employee or business participant.
JobKeeper business eligibility and turnover tests
For payments in the first extension period, businesses must demonstrate that their actual (not projected) GST turnover has significantly fallen in both the June and September 2020 quarters, relative to the corresponding quarters in 2019.
For payments in the second extension period, businesses need to demonstrate a significant fall in their actual GST turnover for June, September and December 2020 quarters, relative to their corresponding quarters in 2019.
JobKeeper will remain open to new business applicants, provided they meet the eligibility and turnover requirements.
For the latest and most up-to-date information on JobKeeper payments and eligibility, visit the ATO website.