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PKF New England North West

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Jamie Donovan

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Extension of the JobKeeper Payment – changes announced 7 August 2020

20 Aug 2020

The Federal Government announced on 7 August 2020, further changes to the JobKeeper Payments given the economic uncertainty arising from the Victorian shutdowns. It is projected a further $85.7 billion cost will be added to the scheme.

Eligibility Criteria

Under this extended program, businesses and not-for-profits will be required to reassess their eligibility with reference to the actual GST turnover (projected GST turnover under existing rules).

Assessment will generally be based on details reported in the Business Activity Statement (BAS). In broad terms, GST turnover is calculated as it is for GST purposes, and includes all taxable supplies and GST free supplies but not input taxed supplies.

Further details surrounding alternative arrangements will be put in place to confirm assessment for businesses or not-for-profits that are not required to lodge a BAS (i.e. member of a GST Group).

Consistent with existing rules, participating businesses and not-for-profits will need to demonstrate:

  • 30% fall in turnover (for an aggregated turnover of $1 billion or less)
  • 50% fall in turnover (for an aggregated turnover of more than $1 billion)
  • 15% fall in turnover (for ACNC-registered charities other than universities and schools).

Note: other eligibility rules remain unchanged.

Alternative tests remain available to assist with establishing eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019.

Businesses in liquidation remain ineligible to participate in the JobKeeper scheme.

Eligible Employees

Employees are eligible in the extension period if they:

  • are 18 years or older and currently employed by an eligible employer (even if stood down and rehired)
  • were employed on the following basis:
    • were (for the eligible employer) a full-time, part-time or fixed term employee at 1 July 2020 (was 1 March 2020); or
    • a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer
  • meet one of the following categories:
    • An Australian citizen;
    • Permanent visa holder;
    • A Protected Special Category Visa Holder;
    • A non-protected Special Category Visa Holder (residing continually in Australia for 10 years of more); or
    • A Special Category (Subclass 444) Visa Holder.
  • were not in receipt of any of the following payments during the JobKeeper fortnight:
    • Government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010; or
    • A payment in accordance with Australian workers compensation law for an individual’s total incapacity for work.

16 and 17 year olds may also qualify if they are not undertaking full time study or are independent.

From 20 July 2020, employees of a Child Care Subsidy approved service under Family Assistance Law and sole traders operating a child care service will not be eligible for the JobKeeper payment.

Extended JobKeeper Program - Payment Rate

From 28 September 2020 to 3 January 2021:

  • $1,200 payment per fortnight for all eligible employees (in the four weeks of preceding 1 March 2020 or 1 July 2020) who were working for 20 hours or more a week on average and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • $750 payment per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021:

  • $1,000 payment per fortnight for all eligible employees (in the four weeks of preceding 1 March 2020 or 1 July 2020) who were working for 20 hours or more a week on average and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • $650 payment per fortnight for other eligible employees and business participants.

Payments will continue to be made to eligible employers monthly in arrears by the ATO.

Comparison Periods

The comparison period is outlined using the examples below. For illustration purposes, we have assumed this taxpayer’s aggregated turnover is <$1 billion.

Extension period 1 (28 September 2020 to 3 January 2021)

Actual GST Turnover

2020

2019

Decline for Quarter

September Quarter
 (1 July to 30 September)

$330,000

$500,000

34%

Greater than 30% fall in turnover in the September quarter?

Yes

Note: taxpayers will need to demonstrate they have met the relevant decline the September quarter to be eligible for the payment from 28 September 2020 to 3 January 2021.

Extension period 2 (4 January 2021 to 28 March 2021)

Actual GST Turnover

2020

2019

Decline for Quarter

December Quarter
(1 October to 31 December)

$420,000

$650,000

35%

Greater than 30% fall in turnover in the December quarter?

Yes

Note: taxpayers will need to demonstrate they have met the relevant decline in the December quarter to be eligible for the payment from 4 January 2021 to 28 March 2021.

The above eligibility test has shifted to an easier test so eligible employers only have to show a fall in turnover in the quarter to the end of September or December, compared to the same period last year.

This is a revision of the JobKeeper extension announcement made on 21 July 2020.

Where taxpayers prepare and lodge BAS on a monthly basis, they will need to aggregate the monthly numbers to determine the actual turnover for each quarter.

It is expected participating businesses and not-for-profits will need to assess their eligibility for JobKeeper in advance of their BAS deadlines in order to meet the wage condition.

Further guidance materials will be provided by the ATO.

Find out more about the JobKeeper announcement and access the documents here. Visit our related news articles here.


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