JobKeeper to carry on until 28 March 2021 – but not as we know it


9 September 2020


As we watch the second wave transform the State of Victoria, and having already assisted over 3.6 million Australians remain connected with their employers, it is no surprise that the Federal Government recently announced the extension of the JobKeeper program for a further 6 months until 28 March 2021.  However significant changes have been made to the operation of the scheme, and in this article we discuss the key features of “JobKeeper 2.0”.  

 

New eligibility requirements for businesses

Currently the JobKeeper scheme operates on a ‘once-in, stay-in’ basis, meaning that businesses which satisfied the turnover eligibility criteria when the scheme was first introduced have remained in the scheme and have not needed to reassess their eligibility.

 

This will change when Jobkeeper 2.0 commences.   The modified scheme has been divided into two discrete periods.  The first period will run from 28 September 2020 to 3 January 2021 (First Extension Period), and the second period will run from 4 January 2021 to 28 March 2021 (Second Extension Period).

 

Businesses will need to demonstrate their eligibility at the start of each period, i.e. on 28 September 2020 and again on 4 January 2021, in order to stay in the scheme.

 

In order to qualify for JobKeeper payments during the First Extension Period, businesses will need to be able to show that their actual GST turnover has fallen by the requisite extent in the September 2020 quarter relative to a comparable period (i.e. the September 2019 quarter).

 

In order to qualify for JobKeeper payments during for the Second Extension Period, businesses will be required to demonstrate that their actual GST turnover has fallen by the requisite extent in the December 2020 quarter relative to a comparable period (i.e. the December 2019 quarter).

 

The requisite decline in turnover has not changed and is:

  • 30% for businesses with an annual turnover of less than $1 billion;
  • 50% for businesses with an annual turnover of more than $1 billion;
  • 15% for registered charities and not-for-profits (excluding schools and universities).

 

Not all businesses who are currently receiving JobKeeper payments will qualify for JobKeeper 2.0  It is also expected that some businesses will qualify for JobKeeper payments during the First Extension Period, but will not qualify during the Second Extension Period.

 

New payment amounts

The amount of the JobKeeper payment, which is currently $1,500 per fortnight, will reduce progressively during the First and Second Extension Periods.  The amount will also cease to be a flat rate for all employees, but will vary according to the number of hours worked by each eligible employee (or business participant) during the month of February or June 2020.

 

Employees who worked an average of 20 hours or more per week in either February or June 2020 will be entitled to receive a greater payment, as follows:

 

Extension Period

Payment

First Extension Period (28 September 2020 – 3 January 2021)

$1,200 per fortnight for employees/business participants who worked on average 20 hours or more per week in February or June 2020.

$750 per fortnight for all other employees/business participants.

Second Extension Period (4 January 2021 – 28 March 2021)

$1,000 per fortnight for employees/business participants who worked on average 20 hours or more per week in February or June 2020.

$650 per fortnight for all other employees/business participants.

 

The ATO has indicated that alternative tests and further guidance may be provided for employees whose hours of work in the relevant months were atypical, for example because they were on annual leave.

 

Employers will need to nominate the rate they wish to claim for each eligible employee.  It is likely that penalties will apply if an employer knowingly nominates an incorrect rate.

 

New categories of eligible employees

Under the current scheme, an employee will be an ‘eligible employee’ if (in addition to satisfying other criteria) they were employed by the business on 1 March 2020.  This will change under JobKeeper 2.0.  An employee will be an ‘eligible employee’ if they were employed on 1 July 2020 (or in the case of casual employees, they were employed on a regular basis for at least 12 months as at 1 July 2020). 

 

This means that a business which hired new staff in May or June 2020, following the end of the first wave, will be able to claim JobKeeper payments in respect of those newly hired employees. 

 

What employers need to do now

Prior to the commencement of JobKeeper 2.0 on 28 September 2020, businesses should:

  • collate relevant financial records to be provided to the ATO to establish the requisite decline in turnover;
  • identify any additional employees who may be eligible to receive JobKeeper payments, i.e. those hired after 1 March and before 30 June 2020. Consent to participate in the scheme will need to be obtained from those individuals, however consent will not need to be sought again from employees who are already receiving JobKeeper payments;
  • review timesheets or other records of hours worked by employees during February and June 2020 in order to determine the correct payment amount applicable to each eligible employee.

 

 

This article provides general comments only.  It does not purport to be legal advice.  Before acting on the basis of any material contained in this article, we recommend that you seek professional advice.

 

Authors:

 

Paul Dugan, Principal in our Disputes Team

Contact
Email:  pdugan@dmawlawyers.com.au
Direct Telephone:  +61 8 8210 2266

 

Kylie Dunn, Senior Associate in our Disputes Team

Contact
Email:  kdunn@dmawlawyers.com.au
Direct Telephone:  +61 8 8210 2286

 

The authors would like to thank Lachlan Chuong for his assistance in preparing this article.