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September 25, 2020

JobKeeper 2.0: Changes from September

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James Morris
JobKeeper 2.0: Changes from September

After much speculation, the future of JobKeeper payments has been announced.

Starting from 28 September, the current $1,500 per fortnight JobKeeper payment will be reduced to $1,200 per fortnight, and $750 per fortnight for employees who work less than 20 hours per week.

The scheme will change again from 4 January, with the rate falling to $1,000 per fortnight and $650 for people working less than 20 hours a week. This program will run through till 28 March 2021, taking the entire JobKeeper scheme to a total of $86 billion.

This change in payments comes in the wake of complaints about the flat rate payment, as a quarter of JobKeeper recipients received an income rise.

JobKeeper 2.0 payment  summary:

JobKeeper 2.0: Changes from September

What employees are eligible?

A new definition of eligible employee was announced on 3 August 2020. Eligible employers must have been employed since 1 July 2020 on either a full time or part time basis. Casual employers are elgible if they have been employed on a regular basis for at least 12 months prior to 1 July 2020. Employees must be an Australian citizen or permanent resident.

What employers are eligible?

These changes come along with new eligibility tests for businesses wishing to remain on JobKeeper payments post September:

1. Businesses will be required to demonstrate a reduction in turnover.

  • 30% for businesses with turnovers of $1 billion or less
  • 50% for businesses with turnover of more than $1 billion
  • 15% for ACNC registered charities

2. Business will need to demonstrate an ongoing significant decline in turnover using actual GST turnover rather than projected GST turnover.

3. From 28 September – businesses will be required to show a decline in turnover for the September quarter.

4. From 4 January 2021 – business will need to reassess turnover to demonstrate the decline in turnover test has been met for the December 2020 quarter.

5. Alternative tests at the discretion of the Commissioner of Taxation will still be in effect.

30 March 2020 to 27 September 202028 September 2020 to 3 January 20214 January 2021 to 28 March 2021
Decline in turnoverProjected GST turnover for a relevant month or quarter is expected to fall by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.*Actual GST turnover in the September 2020 quarter fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.
Actual GST turnover in the December 2020 quarter fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.

Note: Many businesses use their Business Activity Statement (BAS) reporting to assess eligibility. BAS deadlines are generally not due until the month after the end of the quarter, therefore eligibility for JobKeeper will need to be assessed before BAS reporting deadlines.

Businesses that were not able to participate in JobKeeper 1.0 are not exempt from JobKeeper 2.0 if they have begun to satisfy the above reduction in turnover tests.

With the JobKeeper 2.0 scheme, a business may be eligible for JobKeeper for the December 2020 quarter but not for the March 2021 quarter, or vice versa.

Do the changes affect JobKeeper payments between now and September?

The current JobKeeper eligibility test remains until the change of eligibility comes into affect on 28 September 2020. So if your business and your employees have passed the original eligibility tests, and the business has continued to pay employees appropriately, JobKeeper will continue to be claimed until 27 September 2020.

What’s the forecast?

There is currently 3.5 million workers receiving JobKeeper payments. The Treasury predicts this to fall to 1.4 million workers from December 2020 and 1 million from March 2021, contributing to the nations recent official recession announcement.

Prime Minister Scott Morrison has spoken out about the adverse incentives of JobKeeper, and the need for a two-tiered system as the economy recovers to ensure the payments do not become a dampener on incentives to work.

The changes have been spread out over coming quarters, designed to given business time to adjust to new payment protocols.

If you are already receiving JobKeeper payments, they will remain the same until 27 September 2020 when the new changes come into affect.

More information can be found on the Treasury website here.

Want to know more?

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