By Alex Millman, NRA Legal
Today, the Prime Minister announced that the JobKeeper package would be extended from 27 September 2020 until 28 March 2021.
This news comes as welcome relief as businesses still struggle with uncertainty, particularly with the situation in Victoria demonstrating how quickly circumstances can change.
There will, however, be changes to both the amount of the JobKeeper payments and the businesses that can claim them.
Two stages of JobKeeper extension
The first important difference is that the extension to the JobKeeper scheme is divided into two three-month periods:
- 28 September 2020 – 3 January 2021; and
- 4 January 2021 – 28 March 2021.
Each period will bring with it a reduction to the JobKeeper amount and a re-testing of business eligibility on the basis of their decline in turnover.
Changes to business eligibility
In order to continue to receive JobKeeper payments, businesses will need to reassess their eligibility on the basis of a decline in turnover. This is designed to ensure that businesses which no longer need government support do not receive it unnecessarily.
The amount of the decline in turnover that businesses will be required to demonstrate will not change, however this assessment must be based on an actual, rather than reasonably expected, decline in turnover.
To recap, the requisite decline in turnover is:
- for businesses with an aggregated turnover of more than $1 billion – 50%
- for businesses with an aggregated turnover of less than $1 billion – 30%
- for registered charities – 15%
In order to be eligible for JobKeeper after 28 September 2020, businesses will need to show the requisite decline in turnover in each of the June 2020 and September 2020 quarters, relative to comparable periods (usually the same quarters in previous years).
In order to be eligible for JobKeeper after 4 January 2020, businesses will need to show the requisite decline in turnover in each of the June, September and December 2020 quarters, relative to comparable periods (usually the same quarters in previous years).
It is important to note that the decline in turnover must have occurred in each quarter; the decline in turnover cannot be aggregated across the all quarters.
This means that if a business qualifies for JobKeeper from 28 September 2020, but has a strong December quarter resulting in a decline in turnover of less than the requisite amount, they will not be eligible for JobKeeper from 4 January 2021.
The Treasury is aware that the BAS lodgment date for these quarters is later than the date at which businesses will need to make the assessment of their turnover, and advises that businesses will need to assess their eligibility in advance of those deadlines.
Changes to the JobKeeper amount
The amount of the JobKeeper payment will also change from 28 September 2020.
From 28 September 2020, there will be two tiers of JobKeeper payment based on whether the employee worked an average of 20 hours or more per week between 1 February and 29 February 2020, as follows:
From 28 September 2020
From 4 January 2021
|Employees who worked an average of 20 hours or more per week in February 2020||$1,200 per fortnight||$750 per fortnight|
|All other employees||$1,000 per fortnight||$650 per fortnight|
Importantly, businesses should be aware that the employee eligibility criteria have not changed; any employee currently eligible for JobKeeper will remain eligible to continue receiving JobKeeper payments.
The tiered system is intended to ensure that the wage subsidy does not result in employees obtaining a significant benefit above what they would have normally earned.