JobKeeper 2.0 Revisited

10 August 2020

The tightened JobKeeper eligibility rules announced by the Government just two weeks ago will be reversed as the Federal Government acknowledges the impact of the Stage Four Victorian restrictions.

Whilst the current situation in Victoria has brought to focus those eligibility issues that have been previously identified by professional accounting bodies, the JobKeeper Scheme is a Federal Government initiative, with both the existing and extended JobKeeper Schemes available to all Australian businesses significantly impacted by the COVID-19 pandemic. The recent amendments to the scheme demonstrate the Government’s willingness to provide targeted support to those businesses most in need.

Two changes announced

As part of today’s announcements, the Treasurer stated that changes will be made to both the Business Turnover Test and the Employee Eligibility Test to allow for greater access to the extended JobKeeper Scheme and to take into consideration the initial buoying of the economy following the lifting of the first wave of restrictions.

Business Turnover Test

As previously announced in July 2020, businesses hoping to receive JobKeeper under the extended scheme (set to apply from 28 September 2020 to 3 January 2021) were required to demonstrate a requisite decline in actual turnover in both the June and September quarters.

However, under the changes announced by the Treasurer today, affected businesses will only be required to show that actual turnover has significantly fallen for the September quarter, compared to the same period last year. Businesses will still be required to prove their eligibility again in January 2021, however, eligibility will only be based on the December quarter, as opposed than the two previous quarters as previously announced.

Employee Eligibility Test

Previously, employees had to be on the books of a business from the first of March 2020 to be eligible to receive JobKeeper payments.

In recognition of businesses that have taken on additional staff in the initial months following the lifting of the stage four restrictions, the Government has announced that those employees who were employed as of 1 July 2020 will now also be able to access the program.

This will also now extend eligibility to those employees that were aged 18 or older as at 1 July 2020, who may otherwise not have qualified based on their age in March.

However, if the employee is the holder of a Subclass 444 (Special category) visa, they must have held that visa and been a resident of Australia as at 1 July 2020 to be eligible. Importantly, this change will apply from 3 August 2020, thereby increasing employee eligibility under both the existing and extended JobKeeper Scheme.

Payment rate changes to proceed

The planned reductions in the JobKeeper payments will still go ahead, with a drop from the current rate of $1,500 per fortnight to two tiers of payments of $1,200 for full-time workers, and $750 for those working less than 20 hours per week.

The new rates will apply from 28 September 2020 until 3 January 2021.

From 4 January 2021 until 28 March 2021 the fortnightly payment rates will be further reduced to $1,000 for full-time workers, and $650 for those working less than 20 hours per week. To determine which tier of JobKeeper payments employees are eligible for, employers will need to use the two fortnightly pay periods to either 1 March  2020, or 1 July  2020. If an employee has been eligible for JobKeeper since 1 March 2020, the fortnightly period with the highest number of hours worked will be used. 

Summary

For your ease of reference, we provide you the following high-level snapshot to help you navigate through how the current and extended scheme will operate:

Next Steps

We remind you that the JobKeeper Payment will continue to remain open to new recipients, provided they meet the eligibility requirements and the turnover tests that apply during the relevant JobKeeper Payment period. 

• We encourage those businesses, including those that have not previously qualified for the JobKeeper Scheme, to reconsider whether any employees that have been employed after 1 March 2020, may now satisfy the employee test.
   
• We also remind you that the eligibility for the JobKeeper Scheme may continue to be assessed until March 2021.  Given this, we recommend that all businesses reevaluate whether they now (or could potentially) meet the eligibility requirements, under both the existing Scheme and under the extended JobKeeper Scheme.
   
• As previously communicated, it will be important to document your eligibility to the Scheme and ensure that all initial and ongoing reporting requirements and obligations are met.  Whilst the ATO have advised that they will not seek to recover JobKeeper payments and penalties from those applicants that have made a genuine and honest mistake in assessing their eligibility, this remains an area of increased scrutiny and review and the upmost of care and discretion should be exercised.
   
• Cooper Partners will provide you with more information regarding the new eligibility tests that are set to apply from 28 September 2020, as this legislation and guidance is released.

WHERE WE CAN ASSIST YOU

If you would like to discuss any matters in this newsletter in further detail, please do not hesitate to contact your Cooper Partners Engagement Team.

This newsletter is current as of 10 August 2020, however, please note that announcements and changes are being made by the Government and the ATO regularly, and we expect that the tax and business-related responses will continue to evolve.  Before acting upon the content of this newsletter, please contact us to discuss how the above applies to your specific circumstances.