The JobKeeper payment subsidy has been extended until 28 March 2021 for eligible businesses (including the self-employed) that continue to be impacted by COVID 19.
These changes will take effect from 28 September 2020, with further changes to occur in January 2021. Eligible business that are currently receiving the JobKeeper payment will continue to do so in its current form until 27 September 2020.
The new JobKeeper Payment rates
From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be as follows:
- $1,200 per fortnight for eligible employees who worked an average of 20 hours or more a week (previously $1,500 per fortnight); and
- $750 per fortnight for other eligible employees
From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be as follows:
- $1,000 per fortnight for eligible employees who worked an average of 20 hours or more a week; and
- $650 per fortnight for other eligible employees
Business will need to nominate the rate for each of their eligible employees and will continue to be required to make the payments to employees equal to or greater than the JobKeeper Payment rate before claiming from the ATO.
The same rates will apply for other eligible business participants, for example, self-employed individuals.
The new decline-in-turnover test
To qualify for the extension, eligible businesses will need to demonstrate a continuing decline in turnover for each of the extension periods, as well as continuing to meet all other eligibility requirements. The new decline in turnover test is stricter as it requires a decline in turnover over time, rather than in a single month.
- To qualify for the extension period from 28 September 2020 to 3 January 2021, an eligible business will need to demonstrate that its actual GST turnover has declined by the required amount. This is 30% if its aggregate turnover is $1 billion or less, and 50% if its aggregate turnover is greater than $1 billion in both the April-June quarter 2020 and July-September quarter 2020, relative to the comparable quarters in 2019.
- To qualify for the extension period from 4 January 2021 to 28 March 2021, an eligible business will need to demonstrate that its actual GST turnover has declined by the required amount in each of the April-June, July-September, and October-December quarters 2020 relative to the comparable quarters in 2019.
The new turnover test requires a comparison of actual GST turnover, rather than a projected GST turnover. This may create some complications as the relevant BAS may not be due until after an eligible business is required to nominate its employees. It also requires a continued decline in turnover for nine months (being April to December 2020) to qualify for the final extension period, although it is the quarters that are tested, not the individual months. Therefore, if the required decline in turnover is not achieved in a particular month, this should not matter provided the required decline in turnover has occurred for the relevant quarter.
Further updates and guidance around the JobKeeper payment subsidy and eligibility are expected in the coming months. If you have any questions, do not hesitate to reach out to Calibre Business Advisory and our expert team.