The Federal Government announced on 21 July 2020 a much anticipated extension to the JobKeeper program to continue supporting businesses struggling to recover during the COVID19 pandemic.
The key changes released so far are outlined below. We are still waiting on the finer detail and legislation and will keep you updated as more information is released.
The key features of the current JobKeeper program ending on 27 September 2020 are:
– All eligible employees are paid a minimum of $1,500 per fortnight;
– Businesses must demonstrate a decline in turnover of either 15% or 30% or 50% and this is assessed prior to enrolling in the program; and
– Employers claim the JobKeeper from the ATO after the end of each month by lodging a declaration.
NEW TURNOVER TEST
For businesses to continue participation in the JobKeeper program from 28 Sept 2020, they will need to re-assess their eligibility and demonstrate an actual decline in turnover. The new turnover test will be:
– From 28 September 2020 to 3 January 2021: decline in actual GST turnover in both the June and September 2020 quarters, relative to comparable 2019 periods.
– From 4 January to 28 March 2021: satisfy decline in actual GST turnover in each of the June, September and December 2020 quarters, relative to comparable 2019 periods.
Businesses that were not eligible to JobKeeper previously, can still enter the extended program provided they meet the existing eligibility requirements and the additional turnover tests. This would assist businesses that did not suffer a decline in turnover until post September 2020.
The ATO will have the discretion to use alternative turnover tests.
We are waiting for the release of the final legislation to confirm how the new turnover test will be applied.
It will be essential for businesses to keep their accounting records up to date to prove satisfaction of the new turnover test in October 2020 and January 2021.
NEW JOBKEEPER PAYMENT AMOUNTS
Under the current program, all eligible employees receive $1,500 a fortnight. This will change from 28 September 2020 and there will be two payment amounts.
Payment Amounts from 28 Sept 2020 to 3 Jan 2021
– If you worked 20 hrs or more a week = $1,200 per fortnight
– If you worked less than 20 hrs a week = $750 a fortnight
Payment Amounts from 4 Jan to 28 Mar 2021
– If you worked 20 hrs or more a week = $1,000 per fortnight
– If you worked less than 20 hrs a week = $650 a fortnight
In order to identify which payment amount tier is applicable, businesses will need to go through their payroll records for each employee in the 4 weeks prior to 1 March 2020 (ie. February 2020 month) to identify who worked consistently 20 hrs or more a week. Good payroll records will be essential.
Businesses will need to then nominate which payment amount is to be claimed for each employee.
The ATO may exercise discretion in this and allow employees to be paid at the higher amount if they worked unusual hours in February 2020.
SOLE TRADERS AND ELIGIBLE BUSINESS PARTICIPANTS
Non-employees will still be eligible for the JobKeeper provided they satisfy the 20 hr a week test. They will need to demonstrate they were “actively engaged in the business” for 20 hrs or more a week in the Feb 2020 month.
This applies to:
– Sole traders;
– Partner in a partnership;
– Beneficiary of a trust; and
– Shareholder or director of a company.
The ATO may exercise discretion in the 20 hrs a week requirement and allow them to be paid at the higher amount if they worked unusual hours in February 2020.
Please contact us to find out more. The team at EMspire Advisory are experienced accountants, bookkeepers and tax agents in Sydney and would like to help you create, grow and succeed in business.
Please note that this information is not specific and is general in nature and cannot be relied upon as advice. Please contact us for specific advice for you and your circumstances.