JobKeeper Payment 2.0

Ever since the Federal Government first introduced the JobKeeper Payment, the fear in the community had always been – what would happen to the economy when the scheme was scheduled to end at the end of September 2020? Enter JobKeeper Payment 2.0. 

Many predicted that the abrupt end to the scheme would spell economic disaster as businesses that were temporary propped up by the scheme would drop like flies, which would drag the economy into a depression most of the working population had never seen before.

It would appear the Government shared the same concerns. Rather than letting the scheme end as originally announced and pushing the economy off the fiscal cliff, the Government has announced an extension to the JobKeeper Payment scheme to provide a gradual scale back of the scheme and hopefully a softer landing for the economy.

The key features of the extended JobKeeper Payment (or JobKeeper Payment 2.0 as it’s informally known) scheme are as follows:

Extended JobKeeper end date

The scheme is now extended to 28 March 2021.

Importantly, for businesses that previously qualified for the scheme, those businesses will continue to receive payments until 27 September 2020 without having to re-qualify.

However, if a business wishes to continue to receive the JobKeeper Payments from 28 September 2020, it will need to requalify for the extended scheme under the new eligibility tests detailed below.

Extended eligible employees

The scheme now covers employees who were employed at 1 July 2020 (rather than 1 March 2020 under the previous system).

In other words, new employees who were hired since 1 March 2020 and were on the payroll on 1 July 2020 are now covered.

Employers can only opt out of the scheme if an employee for whom the employer is receiving JobKeeper Payments actively advises the employer that they “do not agree to be nominated” for the scheme from the nominated date. Upon receipt of the employee’s advice, the employer will simply claim less JobKeeper Payments from the time at which the employee wishes to opt out.

New payment amounts

The payment rate remains at $1,500 per fortnight for each eligible employee until 27 September 2020.

From 28 September 2020, the payment will be reduced to $1,200 per fortnight for each eligible employee.

From 4 January 2021, the payment will be further reduced to $1,000 per fortnight for each eligible employee. A lower rate will apply to workers who work fewer than 20 hours per week.

New eligibility tests

For payments from 28 September 2020, the relevant business must have experienced an actual drop in the aggregated GST turnover of 50% for businesses with an aggregated turnover of more than $1 billion and 30% for businesses with an aggregated turnover of $1 billion or less.

For payments from 28 September 2020, the eligibility requirements will be based on the business’ actual GST turnover (not projected GST turnover as was previously relevant).

For payments from 28 September 2020 to 3 January 2021, the relevant business needs to demonstrate a drop in actual aggregated GST turnover for the quarter ending 30 September 2020 compared with that for the quarter ended 30 September 2019.

For payments from 4 January 2021 to 28 March 2021, the relevant business needs to demonstrate a drop in actual aggregated GST turnover for the quarter ending 31 December 2020 compared with that for the quarter ended 31 December 2020.

Enrolling for the scheme

To enrol for the JobKeeper Payment, go to the Australian Taxation Office’s website here.

Be mindful that there are reporting due dates for each fortnight of JobKeeper Payments. If you miss the reporting deadline for a particular fortnightly payment, you would not be eligible for the payment for that fortnight. So be sure to schedule those deadlines in your calendar to avoid missing them.

Last words on jobkeeper payment 2.0…

The question that is on everyone’s mind is – will JobKeeper Payment 2.0 work? The answer is that nobody truly knows just yet – only time will tell. What I can say however, is that a more gradual scaling back of the scheme is probably much better than ending it abruptly. But one thing is certain – regardless of how the economy will be weaned off from the JobKeeper Payment, there will be some businesses that fail. What the scheme does provide is the luxury of time to minimise that possibility, so use that time wisely to maximise your business’ chance of survival.

Important disclaimer: No person should rely on the contents of this article without first obtaining advice from a qualified professional person. This article is provided on the terms and understanding that the author and BDO Services Pty Ltd are not responsible for the results of any actions taken on the basis of information in this article, nor for any error in or omission from this article. The article is provided for general information only and the author and BDO Services Pty Ltd are not engaged to render professional advice or services through this article. The author and BDO Services Pty Ltd expressly disclaim all and any liability and responsibility to any person in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this article.