JobKeeper 2.1: JobKeeper extension scheme modified to expand eligibility
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Since the Government’s announcement on 21 July 2020 to extend the JobKeeper Payment to 28 March 2021, the second wave of COVID-19 has forced Melbourne to enter stage 4 restrictions and other states to reintroduce social restrictions to prevent a similar resurgence within their borders.
To mitigate the economic impact of the ongoing crisis, on 7 August 2020 the Treasury has further revised the eligibility criteria of the JobKeeper extension scheme so as to make it easier for businesses to qualify and access the program beyond 28 September 2020. The changes are as follows.
- Continued decline in GST turnover test scrapped
Firstly, instead of having to prove a continued decline in actual GST turnover through the June and September quarters as initially announced, under the revised criteria businesses will only need to meet the test in the September 2020 quarter to be eligible for JobKeeper payments from 28 September 2020 to 3 January 2021. Similarly, to be eligible for JobKeeper payment from 4 January to 28 March 2021, businesses now only have to meet the decline in turnover tests once in the December 2020 quarter.
- Employee eligibility reference date changed to 1 July 2020
Secondly, while the employee eligibility criteria for JobKeeper per se remain substantively unchanged (see here for details), the reference date for assessment has been changed from 1 March 2020 to 1 July 2020. This change is significant as it enables eligible employees who were hired after 1 March 2020, as well as those who failed to meet the criteria as at 1 March 2020 but subsequently became eligible by 1 July 2020, to receive the JobKeeper payments. Effective from 3 August 2020, the new reference date is used to assess employee eligibility for the remaining four fortnights of the current JobKeeper scheme and the entirety of the extended scheme.
- Additional reference period for ‘averaging working hours per week’ test
Thirdly, the initial announcement on JobKeeper extension program introduced a two-tier payment system, which uses the test of ‘average weekly working hours over a reference period’ to determine which payment rate an employee will receive. The only reference period as originally announced is the four weeks of pay periods before 1 March 2020.
In the revised scheme, the four weeks of pay periods before 1 July 2020 has been added as an alternative reference period. Between the two reference periods, the one with the higher number of average working hours is to be used to determine the payment tier. The payment rates are unchanged and are as follows.
- From 28 September 2020, the JobKeeper payment rates will be $1,200 per fortnight for eligible employees who were working on average at least 20 hours per week during a reference period and $750 per fortnight for other eligible employees; and
- From 4 January 2021, the JobKeeper payment rates will be $1,000 per fortnight for eligible employees who were working on average at least 20 hours per week during a reference period and $650 per fortnight for other eligible employees.
For further details about extension of the JobKeeper payment, access this Treasury factsheet.
The team at Collins Wentworth are experienced in business financial matters. If you have concerns about financial position of your business and wish to know more about how we can assist you, contact us today.
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