Tuesday the 15th of September saw the official release of the Jobkeeper 2.0 rules, 12 days short of their commencement. They can be found here.
As previously communicated, the first extension period will run from the 28th of September 2020 through until the 3rd of January 2021 with a two-tiered payment system.
Those employees who worked for 80 hours or more in the 28 day period before either 1 March 2020 or 1 July 2020 will receive $1,200 per fortnight with all other employees receiving $750.
The second extension period will run from the 4th of January 2021 to 28 March 2021 at which point the fortnightly rates will drop to $1,000 and $650 per fortnight respectively.
It is understood that the same hourly test will apply to small business participants requiring an assessment of the active hours they were engaged in the business for the 28 day period before either 1 March 2020 or 1 July 2020.
In order to qualify for the first extension period the entity must satisfy the decline in turnover test. This requires the entity to demonstrate that their actual GST turnover has declined by the required percentage for the quarter ended 30 September 2020, relative to their comparable quarter for this period (quarter ended 30 September 2019).
The percentage decline for the quarter for the entity under this new test must be equal to or greater than the required percentage decline in turnover of 15 percent, 30 percent or 50 percent (as applicable). Entities are required to assess which percentage applies to them using the existing Jobkeeper 1.0 tests. These tests relate to whether the entity is an ACNC-registered charity (15% decline) or their aggregated turnover level (30% or 50% decline subject to turnover level) to establish their relevant percentage decline.
For the second extension period the entity must satisfy the decline in turnover test for the 31 December 2020 quarter. This test will be satisfied where the entity can demonstrate that their actual GST turnover has declined by the required percentage for the quarter ended 31 December 2020, relative to the comparable quarter for that period (quarter ended 31 December 2019).
Upon meeting the decline in turnover tests the entity must satisfy all other conditions under the scheme. For new participants to the Jobkeeper 2.0 scheme this will include making the required election to enter the scheme, providing the relevant notice requirements to employees and meeting the wage payment conditions over the scheme itself.
For existing Jobkeeper 1.0 participants there is no need to re-elect for Jobkeeper 2.0 but notification will need to be made in relation to the rates being paid to employees under the two-tiered payment system along with meeting the wage payment conditions.
With the ability to fall in and out of the Jobkeeper program, it is important that all employers monitor their payments to employees to ensure they meet the wage payment conditions relevant to the applicable quarters.
Once again the legislation provides the Commissioner of Taxation with powers to specify an alternative decline in turnover test as well as an alternative reference period for working out if the higher or lower Jobkeeper rate applies in respect of eligible employees and business participants.
With Jobkeeper 2.0 commencing in less than two weeks, now is the time for you to assess your eligibility to continue with the program or enrol in the program for the first time. Further, given the introduction of the two-tiered payment system, now is the time to assess each of your employee’s eligibility to the full rate or part rate so that you are ready to update your payroll systems and notify the ATO accordingly.
For assistance with your JobKeeper needs, please contact your Davidsons team member or email us at firstname.lastname@example.org with your enquiry.
Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.