Jobkeeper 2.0 – What Business Owners Need To Know

On 21 July 2020, the Government announced that due to the ongoing COVID-19 crisis, the JobKeeper Payment scheme will be extended by six months until 28 March 2021, from the original end date of 27 September 2020. The period of the extended scheme comprises 13 fortnights — i.e. the proposed extension exactly doubles the length of the original scheme. From 28 September 2020:

  1. a two-tier payment rate will apply based on the worker’s average weekly work hours during a reference period;
  2. the current $1,500 per fortnight payment rate will be reduced on 28 September 2020 and reduced further on 4 January 2021;
  3. the decline in turnover will be retested on a quarterly basis; and
  4. the decline in turnover test will be based on actual GST turnover.

On 7 August 2020, the Treasurer announced further changes to increase access to the scheme during the proposed extension period (i.e. 28 September 2020 to 28 March 2021), driven by the ongoing crisis and the implementation of Stage 4 business restrictions in Victoria.

Under these revisions, from 28 September 2020, entities will only have to meet the quarterly decline in turnover test for (broadly) the previous quarter instead of multiple quarters as was originally proposed.

Significantly, from Monday 3 August 2020, the employee eligibility test date will move from 1 March 2020 to 1 July 2020. The new reference date will apply for the last four fortnights of the legislated scheme as well as the duration of the proposed extended period. Staff who were hired after 1 March 2020 may now be eligible for JobKeeper.

The Treasurer’s media release also reports the following anticipated consequences of the revisions to the proposed extended scheme:

  1. an additional cost of $15.6 billion for a revised total cost of $101.3 billion;
  2. while the extended scheme will apply nationally, it is expected that more than 80 per cent of the increased payments will be paid to Victorian businesses; and
  3. around four million Australians will be eligible individuals under the scheme at the end of the September 2020 quarter, falling to around 2.24 million in the December 2020 quarter and 1.75 million in the March 2021 quarter.

What if I don’t meet the additional turnover test? Will the ATO discontinue my current payments before 28 September?

If a business or not-for-profit does not meet the additional turnover tests for the extension period, this does not affect their eligibility prior to 28 September 2020.

The Treasury has also confirmed that the JobKeeper payment will continue to remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.

What are the new JobKeeper amounts?

Besides stepping up eligibility, from a previously fairly fluid approach, the government has announced a significant reduction in the JobKeeper payment rate, scrapping its previous flat-rate approach.

“We made the conscious decision to have a flat-rate payment because we understood at that time that people were losing second and third jobs,” PM Morrison said of the original JobKeeper amount.

The PM elaborated that given the changed situation, a two-tiered system is now possible.

From 28 September 2020 to 3 January 2021, the payment rate will be $1,200 per fortnight for those who were employed full-time in the four weeks before 1 March 2020.

Employees working in the business for less than 20 hours a week on average will receive $750 per fortnight instead of the current single rate of $1,500.

However, this will change further.

In fact, from 4 January 2021 to 28 March 2021, the payment rate will be reduced to $1,000 per fortnight for full-time workers, and $650 for part-time employees working 20 hours a week or less.

The government has confirmed that businesses and not-for-profits entering JobKeeper 2.0 will be required to nominate which payment rate they are claiming for each of their eligible employees or business participants.