Sum Total Accounting and Business

Sum Total Accounting and Business

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JobKeeper 2.0 Explained

The Australian Federal Government has announced an extension to the existing JobKeeper wage subsidy for eligible businesses (including self-employed) and not-for-profits from the original end date of 27th September 2020 to 28th March 2021. However, JobKeeper 2.0 will have some crucial differences from the original JobKeeper scheme. 

Key Points:

  • The JobKeeper 2.0 will be broken up into two additional periods of eligibility
  • An introduction of a two-tier payment rate for each new period
  • Additional turnover tests to be eligible for JobKeeper 2.0

JobKeeper 2.0 Periods and Payment Rates

The two payment rates are based on the number of hours worked in the four weeks before 1st March 2020

From 28th September 2020 to 3rd January 2021

  • $1200 per fortnight for employees who worked 20 hours or more per week on average.
  • $750 per fortnight for employees who worked below 20 hours per week on average.

From 4th January 2021 to 28th March 2021

  • $1000 per fortnight for employees who worked 20 hours or more per week on average.
  •  $650 per fortnight for employees who worked below 20 hours per week on average.

Eligible Employers

Eligible organisations include companies, partnerships, trusts, sole traders, not for profits and charities. For organisations to be eligible for JobKeeper 2.0 they need to demonstrate the following decline in turnover, same as the existing eligibility rule:

  • 50% decline for those with an aggregated turnover of more than $1 billion;
  • 30% decline for those with an aggregated turnover of $1 billion or less; or
  • 15% decline for Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities).

Additional Turnover Tests

From 28th September 2020 to 3rd January 2021 

  • To be eligible for the JobKeeper 2.0 extension for this period, a business, including self-employed and not-for-profit organisations, are required to meet the decline in turnover test in June and September quarters compared relatively to the corresponding quarters in 2019.
From 4th January 2021 to 28th March 2021
  •  To be eligible or the next year, a business, including self-employed and not-for-profit organisations, are required to further reassess their eligibility for JobKeeper and demonstrate that they meet the decline in turnover test in June, September and December quarters compared relatively to the corresponding quarters in 2019. 

Eligible Employees

Eligibility rules for employees remain unchanged. This means you are eligible if you:

  •  are currently employed by an eligible employer (including if you were stood down or re-hired)
  • were for the eligible employer (or another entity in their wholly-owned group) either:
  1.  a full-time, part-time or fixed-term employee at 1st March 2020; OR
  2. a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1st March 2020 and not a permanent employee of any other employer.
  •  were aged 18 years or older at 1st March 2020 (if you were 16 or 17 you can also qualify for fortnights before 11th May 2020, and continue to qualify after that if you are independent or not undertaking full time study). 
  • were either: 
  1. an Australian resident (within the meaning of the Social Security Act 1991); OR
  2. an Australian resident for the purpose of Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1st March 2020.
  • were not in receipt of any of these payments during the JobKeeper fortnight:
  1. Government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010; OR
  2. A payment in accordance with Australian worker compensation law for an individual’s total incapacity for work.

Only one employer can claim the JobKeeper Payment in respect of an employee. 

The self-employed will continue to be eligible to receive the JobKeeper Payment where they meet the relevant turnover test, and are not a permanent employee of another employer.

Alternative Eligibility Tests

Similar to the current JobKeeper eligibility criteria, the Commissioner of Taxation will continue to have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019. 

As a result, the Commissioner has determined alternative tests for a fall in turnover for businesses and not-for-profits where the basic test is not relevant.

Circumstances where an alternative test applies:

  •  The entity commenced business after the relevant comparison period (the business did not exist in that period) but not on or after 1st March 2020. 
  • The entity acquired or disposed of part of the business after the relevant comparison period (the business is not the same business in that period as it is now). 
  • The entity undertook a restructure after the relevant comparison period (the business is not the same business in that period as it is now). 
  • The entity’s turnover substantially increased by: 
  1.  50% or more in the 12 months immediately before the applicable turnover test period; OR 
  2. 25% or more in the 6 months immediately before the applicable turnover test period; OR
  3. 12.5% or more in the 3 months immediately before the applicable turnover test period.
  •  The entity was affected by drought or other declared natural disaster during the relevant comparison period. 
  • The entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period, excluding entities that have cyclical or regular seasonal variance in their turnover, OR
  • The entity is a sole-trader or small partnership where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover.

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