Treasury has now released the rules for the JobKeeper extension that will operate from 28 September 2020 until 28 March 2021. The rules set out an additional decline in turnover test and introduce a two-tiered payment system. The changes may allow those individuals who had not previously been enrolled in the original JobKeeper to receive payments under JobKeeper 2.0.

Decline in turnover tests

Under the JobKeeper extension businesses will be required to satisfy the original decline in turnover test (based on projected GST turnover), as well as the new actual decline in turnover test.

Businesses already receiving the original JobKeeper payment will only need to satisfy the actual decline in turnover test (in addition to the employee nomination and notification requirements) in order to continue to be eligible for the JobKeeper payments beyond 28 September.

New enrolments in JobKeeper will need to ensure that they satisfy both the projected and actual decline in turnover tests. Ultimately, this requirement amounts to semantics, as satisfying the actual decline in turnover test will result in a satisfaction of the projected decline in turnover test.

The actual decline in turnover test requires the entity’s actual turnover to have declined by the appropriate percentage (30% for businesses with turnover not exceeding $1 billion) during the quarter ended 30 September 2020 compared with the September 2019 quarter. The Commissioner of Taxation will have the ability to set alternative tests for the decline in turnover, as was the case with the original JobKeeper payments. He has not yet done so.

In order to continue to receive JobKeeper beyond December 2020, the turnover test will need to be reassessed to compare the actual decline in turnover for the December quarter, compared with the prior corresponding period.

Payments and wage condition

The JobKeeper extension payments will be based on a two-tiered system and will depend on the number of hours worked by an employee (or has paid leave, or absence on public holidays) during a “reference period”. In addition, payments for business participants will be determined by the “hours of active engagement” in the business.

The two standard reference periods are the 28 days prior to either 1 March 2020 or 1 July 2020. The Commissioner may determine alternative reference periods.

The payment rates are outlined below:

Employers must use the reference period which results in an employee receiving the highest applicable JobKeeper rate. Additionally, the ATO must be notified of the eligible employees’/business participants’ details, including which payment rate applies to them. Businesses must then notify the employees/participants of the payment rate that applies to them.

The wash up

For those businesses looking to apply for the JobKeeper extension, it will be imperative to follow these steps:

  1. Have your accounts (for this calendar year and 2019) up to date to allow for assessments of the actual decline in turnover test for the September quarter;
  2.  Have appropriate records of the hours worked by employees and businesses participants in each of the reference periods. This will assist you to determine which rate of JobKeeper payments your staff members will be eligible for; and
  3.  If your business doesn’t meet the basic decline in turnover test, review the application of the alternative tests here.

Please contact Murray Howlett or your Pilot Advisor on 07 3023 1300 with any queries in relation to your business’s JobKeeper matters.