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 payment changes summary:
|Hours worked per week||Current Payment until 27 September 2020||28 September 2020 –|
3 January 2021
|4 January 2021 –|
28 March 2021
|Less than 20||$1,500|
|20 or more||$1,500|
New eligibility tests
These changes come along with new eligibility tests for businesses wishing to remain on JobKeeper payments post September:
- 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
- Business will need to demonstrate an ongoing significant decline in turnover using actual GST turnover rather than projected GST turnover.
- From 28 September – businesses will be required to show a decline in turnover for June and September quarters.
- From 4 January 2021 – business will need to reassess turnover to demonstrate the decline in turnover test has been met for the June, September and December 2020 quarters.
- Alternative tests at the discretion of the Commissioner of Taxation will still be in affect.
|30 March to 27 September 2020||28 September 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 June and September 2020 quarters fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same periods in 2019.|
The decline for both of the quarters needs to be met to continue receiving JobKeeper payments.
|Actual GST turnover in the June, September and December 2020 quarters fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same periods in 2019. The decline for all three of the quarters needs to be met to continue receiving JobKeeper payments.|
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.
Assessing if an employee has worked 20 hours or more
Post the JobKeeper changes effective 28 September 2020, payments will be at the lower rate for those employees who worked less than 20 hours per week on average. The period assessed will be the four weeks of pay periods before 1 March 2020.
Alternative tests may be set by The Commissioner of Taxation for those situations where an employee’s or business participant’s hours were not considered usual during February 2020. The ATO will provide guidance for those employees where pay periods are not weekly.
Do the changes affect my 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.
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?
As Government stimulus measures are frequently changing, we are continually updating and creating new tools and information for you. To review the latest materials on COVID-19, please click here. This page will be regularly updated, so please check back in from time to time.
Below are some articles that may interest you:
- Your JobKeeper Questions Answered
- Planning for Post Pandemic Recovery
- $150k Instant Asset Write-Off Extended
- Government Stimulus Package for Business
- JobKeeper Package Update: How to Apply
- Want to Boost Your Tax Return?
We’re here to support you through the changes. From making the most of the stimulus initiatives, through to managing the risks associated with the impact of the Coronavirus, the Modoras team is here to help you build a resilient business. Make well-informed business decisions; 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.