We are now nearing the end date for JobKeeper 1.0 and nearing the commencement date for the JobKeeper 2.0 program.
The Treasurer, Josh Frydenberg recently released a Legislative Instrument outlining various details of the JobKeeper 2.0 program and the Australian Taxation Office (ATO) has since updated their own website with updated commentary on the application of the program.
Below is a snapshot of the more relevant points for the JobKeeper 2.0 program:
As with JobKeeper 1.0, an eligible employer will comprise those employers that conducted a business as at 1 March 2020 and employ ‘eligible employees’ during the fortnight they claim JobKeeper 2.0 payments for.
Where an eligible employer receives JobKeeper payments for eligible employees, the eligible employer will need to ensure that the eligible employee receives wages at least equal to the amount of the JobKeeper payment being received.
Effective from 3 August 2020, the definition of eligible employee was modified. From 3 August 2020, eligible employees are those employees that have been employed since 1 July 2020 on a full time or part time basis. For casual employees, they will represent eligible employees where they have been employed on a regular basis for at least 12 months prior to 1 July 2020.
To be an eligible employee, it is still a requirement that the employee is an Australian citizen or permanent resident. Thus, JobKeeper 2.0 will continue to be unavailable to temporary residents of Australia.
Eligible Business Participants
Under JobKeeper 2.0, Eligible Business Participants continue to be eligible for JobKeeper payments if they are involved in a business operation but are not an employee of that operation. Eligible Business Participants can comprise sole traders that operate a business, individual partners of a partnership that are involved in the business of the partnership, individual beneficiaries of a trust that are involved in the business of the trust, or individual directors or shareholders of a company that are involved in the business of the company.
To be an Eligible Business Participant, the individual cannot also be nominated as an employee of another entity claiming JobKeeper. Furthermore, to be an Eligible Business Participant, the business conducted must have commenced prior to 12 March 2020 and the business must have lodged either a 2019 financial year income tax return or a Business Activity Statement prior to 12 March 2020.
Calculating whether the business has experienced a reduction in turnover
As was previously the case with JobKeeper 1.0, businesses will need to demonstrate that their turnover has reduced by at least 30% (for businesses with turnover of less than $1B per annum), 50% (for businesses with turnover of greater than $1B) or $15% (for ACNC registered charities) during the comparison periods.
Under JobKeeper 2.0, the reduction in turnover test is calculated by reference to the following comparison periods:
|JobKeeper 2.0 period||Turnover testing period||Turnover comparison period|
|December 2020 quarter (comprising JobKeeper fortnights 14 – 19)||30 September 2020 quarter||30 September 2019 quarter|
|March 2021 quarter (comprising JobKeeper fortnights 20 – 26)||31 December 2020 quarter||31 December 2019 quarter|
Under JobKeeper 2.0, the turnover tests are based on actual GST turnover for the quarter and not based on projected GST for the quarter. Furthermore, for JobKeeper 2.0, the ATO has stipulated that turnover needs to be calculated having regarding to the same principles as the business prepares their BAS (i.e. if the business reports its GST on an accruals basis, turnover is calculated on an accruals basis whereas if the business reports its GST on a cash basis, turnover is calculated on a cash basis).
Thus, businesses will need to assess their actual turnover for the September 2020 quarter before assessing whether they are eligible to JobKeeper 2.0 for the December 2020 quarter. Equally, a business will separately need to assess their actual turnover for the December 2020 quarter before assessing whether they are eligible for JobKeeper 2.0 for the March 2021 quarter.
Businesses that did not participate in JobKeeper 1.0 are not precluded from participating in JobKeeper 2.0 if they commence to satisfy the above reduction in turnover tests. Furthermore, it is possible that businesses may be entitled to JobKeeper 2.0 for the December 2020 quarter but not for the March 2021 quarter or vice-versa. This is different to JobKeeper 1.0 where once a business was eligible to enrol for JobKeeper, they continued to remain eligible for the program irrespective of their future turnover.
For those business that cannot satisfy the above reduction in turnover test, the ATO will shortly release alternative tests that can be considered in the alternative. While the ATO has advised that the Alternative Tests will be similar to those Alternative Tests available under JobKeeper 1.0, they have yet to be formally released for JobKeeper 2.0.
Calculating the JobKeeper 2.0 rates
Under JobKeeper 2.0, the rates of payment under the program are phased between the December 2020 quarter and the March 2021 quarter, and there are two tiers of payment (Tier 1 rates and Tier 2 rates) depending on the hours the eligible employee or Eligible Business Participant has worked.
|December 2020 quarter (comprising JobKeeper fortnights 14 – 19)||March 2021 quarter (comprising JobKeeper fortnights 20 – 26)|
|For those eligible employees that worked at least 80 hours (including paid leave) during the month of February 2020 or June 2020 (Tier 1 Employees)||$1,200 per fortnight||$1,000 per fortnight|
|For those Eligible Business Participants that worked at least 80 hours during the month of February 2020 (Tier 1 Eligible Business Participants)||$1,200 per fortnight||$1,000 per fortnight|
|For those eligible employees that did not work at least 80 hours (including paid leave) during the month or February 2020 or June 2020 (Tier 2 Employees)||$750 per fortnight||$650 per fortnight|
|For those Eligible Business Participants that did not work at least 80 hours during the month of February 2020 (Tier 2 Eligible Business Participants)||$750 per fortnight||$650 per fortnight|
What do those businesses that are already enrolled for JobKeeper 1.0 need to do?
Businesses that are already enrolled in JobKeeper 1.0 that remain eligible for JobKeeper 2.0 will not be required to re-enrol for JobKeeper 2.0. Those businesses that are already enrolled in JobKeeper 1.0 that cease to remain eligible for JobKeeper 2.0 will need to cancel their JobKeeper enrolment from 28 September 2020. If a business becomes eligible for JobKeeper 2.0 but was not previously enrolled in JobKeeper, they will need to enrol for JobKeeper 2.0 and separately nominate their eligible employees or Eligible Business Participants.
If you have any further questions relating to the JobKeeper program, please do not hesitate to get in touch with us via your Banks Group representative, (03) 9810 0700 or firstname.lastname@example.org.