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:
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 2020||28 September 2020 to 3 January 2021||4 January 2021 to 28 March 2021|
|Decline in turnover||Projected 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?
With Government stimulus measures frequently changing, our team are working hard to continually update and create new tools and information for you. Click here to view the page.
Below are some articles that may interest you:
We’re here to support you. If you have questions on new scheme’s or how to build a resilient business, contact us on 1300 888 803 to book a catch up with a Modoras professional.
IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.