JobKeeper changes: turnover test and employment start date
Prime Minister Scott Morrison announced further changes to JobKeeper on 7 August 2020. The changes are intended to ensure that eligibility for the revised JobKeeper scheme – to commence on 28 September 2020 – will be based on a single quarter tax period, rather than multiple quarters as previously announced. Employees hired as at 1 July 2020 will now also be eligible to receive JobKeeper.
Treasury has updated its JobKeeper factsheets as at 7 August 2020 to incorporate the PM’s announcements.
The JobKeeper rules implemented in March 2020 in response to the COVID-19 pandemic were due to finish on 27 September 2020. The Government then announced on 21 July 2020 that the scheme would be extended for six months (ie until 28 March 2021), albeit in an amended form.
As a reminder, the key highlights of JobKeeper Version 2 – to start on 28 September – are that:
• the extended scheme will apply at a top rate of $1,200 per employee (down from the current $1,500) per JobKeeper fortnight from 28 September 2020 until 3 January 2021, then drop to $1,000 until 28 March 2021;
• lower rates will apply for part-time and casual employees; and
• businesses will be required to re-test their eligibility for the payment scheme to access the extension.
Changes to turnover test
The latest changes relate to the eligibility test announced in JobKeeper Version 2.
JobKeeper Version 2 originally required that, from 28 September 2020, businesses and not-for-profits seeking to claim JobKeeper payments would have to meet a further decline in turnover test for each of the two periods of extension, as well as meeting the other existing eligibility requirements. That is, at that time businesses would have been required to reassess their eligibility for the JobKeeper extension with reference to their actual turnover in the June and September quarters 2020.
The precise details of JobKeeper Version 2 were as follows:
• In order to be eligible for the first JobKeeper Payment extension period of 28 September 2020 to 3 January 2021, businesses and not-for-profits would have needed to demonstrate that their actual GST turnover had significantly fallen in both the June quarter 2020 (April, May and June) and the September quarter 2020 (July, August and September) relative to comparable periods (generally the corresponding quarters in 2019).
• For the second JobKeeper Payment extension period of 4 January to 28 March 2021, businesses and not-for-profits would have needed to demonstrate that their actual GST turnover had significantly fallen in each of the June, September and December 2020 quarters relative to comparable periods (generally the corresponding quarters in 2019).
Amendments to turnover test and employment start date
The PM has eased the proposed changes to turnover tests (discussed above) for businesses Australia-wide (ie not just for Victoria).
The changes mean that businesses will now only be required to show the requisite actual decline in turnover for the September quarter alone, rather than for both the June and September quarters (for the period to 3 January 2021, ie the December quarter). Similarly, businesses will only need to demonstrate a decline in turnover for the December 2020 quarter, rather than each of the June, September and December 2020 quarters (for the period to 28 March 2021, ie for the March quarter).
The Treasurer also announced a change for the start date for employees, with those hired as of 1 July to be eligible for JobKeeper Version 2 from 3 August. Previously, employees had to be on the books as at 1 March 2020.
If you would like to know more please contact one of our accountants on 07 4639 1099 or come in and see us at 4 Bowen Street Toowoomba.