JobKeeper Extension – What’s next?
With the original JobKeeper scheme coming to an end, the JobKeeper Extension Scheme starts.
The original JobKeeper scheme reaches its conclusion on the 27th of September 2020. Participants in the original scheme will have one more monthly declaration due to lodge in early October, with one final reimbursement from the Australian Taxation Office (ATO) coming shortly after that.
After the 27th September, the JobKeeper Extension scheme starts. The extension requires a reassessment of eligibility.
The reimbursement rates will drop from $1,500 per fortnight for all eligible participant to $1,200 per fortnight for the high rate (80+ hours worked in either the four weeks of pay cycles that ended before 1st March 2020 or four weeks of pay cycles that ended before 1st July 2020, although if you are a sole trader or an eligible business participant, only February 2020 is the reference period) or $750 per fortnight for everyone else. If the reference periods mentioned are not representative of the normal situation then there is some scope to use other periods.
Eligibility for the extension depends upon your turnover reported on your September 2020 quarter Business Activity Statement being down by at least 30% compared to the September 2019 quarter (although there is potentially some alternative tests which the ATO is still to clarify in detail). For some it will be obvious whether they will be eligible or not. However, there will be many business’ that do not know whether they will be eligible or not until some point in October when figures are prepared.
Given this issue, there is an extension until 31st of October 2020 to meet the minimum employee wage condition for the first two fortnights of the extension period, being 28th September 2020 to 11th October 2020 and 12th October 2020 to 25th October 2020.
We would suggest that anyone who is unsure of their eligibility should cease making any JobKeeper topups from 28th September onwards.
Actions that we would suggest are appropriate before the end of September:
- Start putting together the information needed for the September quarter Business Activity Statement
- Cease making JobKeeper topups from 28th September if in any doubt about eligibility for the extension period
- If you know that you are not eligible for the JobKeeper extension please notify your employees that you will cease to claim JobKeeper on their behalf on the 27th September 2020. Please keep a copy of this correspondence.
- Review whether employees will he high rate or low rate employees
Fair Work Changes For JobKeeper
Employers who continue to receive JobKeeper during the extension period can continue to use the JobKeeper provisions in the Fair Work Act to:
- Give employees JobKeeper stand down directions (eg. work less or no hours)
- Give employees JobKeeper enabling directions (eg. change duties or hours)
However you will no longer be able to make agreements with employees to take annual leave during the shutdown periods. This provision will cease from the 28th September 2020.
For those employers who are no longer receiving JobKeeper from 28th September onwards and can demonstrate a 10% decline in turnover for a relevant quarter (will need a certificate from an eligible financial service provider or statutory declaration depending upon your size), you will now be known as Legacy Employers. Under the new provisions Legacy Employers can:
- Issue JobKeeper stand down directions, so long as it doesn’t result in an employee working less than 2 hours on a work day, or reduce full time/part time employees hours of work to less than 60% of their ordinary hours as at 1 March 2020.
- Issue JobKeeper enabling directions relating to duties and work location.
This is also subject to enhanced notice and consultation requirements.
If you have any queries, please email: firstname.lastname@example.org or contact your Accountant directly via email and we will be in touch.
Patrick Rowan & Associates