JobKeeper 2.0 Extension is now Law – What Next for Phase 1?
JobKeeper 1.0 has now officially ended and the final payments will be made from the ATO to employers over the next two weeks. We are now moving into JobKeeper 2.0, which has two phases.
Phase One: 28 October 2020 – 3 January 2021 (14 weeks)
Phase Two: 4 January 2021 – 28 March 2021 (12 weeks)
This article focuses on Phase One.
Who is eligible for Phase One and what are the changes?
- Entities must be able to demonstrate a drop in turnover for the September 2020 Quarter of at least 30% when compared with the same quarter last year.
- Eligibility is calculated based on Actual GST Turnover, whereas under JK1.0 you could use projected turnover.
- Alternative tests for demonstrating the requisite drop in turnover have been released which operate very similarly to the Alternative Tests in JobKeeper 1.0.
- The new scheme has 2 tiers of payment for employees and business participants based on the number of hours they were paid for or the number of hours they were actively engaged in the business respectively.
- Tier 1 $1200 per fortnight 80 or more hours per the Reference Period (see below)
- Tier 2 $750 per fortnight Fewer than 80 hours per the Reference Period (see below)
I am eligible for JK1.0 – but won’t be for JK2.0 Phase 1. What do I need to do?
- Lodge your final monthly declaration for September by 14 October.
- You do not need to satisfy any Single Touch Payroll (STP) reporting obligations, like flagging a JobKeeper Finish.
- If your turnover drops again in the December 2020 Quarter (compared to the December 2019 Quarter) you may renominate for Phase 2 of JobKeeper 2.0 at the beginning of the March 2021 Quarter.
I am eligible for JK1.0 – and will be eligible for JK2.0 Phase 1. What do I need to do?
- Determine your Actual GST Turnover for the September Quarter and ensure that it is 30% less than the same period last year.
- Confirm this decline with the ATO online via the Business Portal (or your tax agent) before 31 October 2020.
- Establish if your eligible employees or business participants fall into Tier 1 or Tier 2.
To do this, determine the number of hours worked in each of the following Reference Periods:
- For business participants: The month of February 2020;
- For employees: The 28 days finishing on the last day of the last pay period that ended before 1 March 2020 and 1 July 2020.
If an employee is Tier 1 in one of those periods and Tier 2 in the other, then they are classified as Tier 1.
If a business participant (other than a sole trader) falls into Tier 1, the business participant must confirm this fact in writing to the entity.
- Notify your employees of their participation and rates within 7 days of notifying the Commissioner.
- Before 31 October make sure you meet the wage conditions by paying your employees the minimums for their Tier.
- Use your payroll software to notify the ATO of which Tier applies to each employee.
I think I might be eligible for JK2.0 – but I am not certain?
- The ATO has announced that it is applying a grace period to satisfy the wage condition for the first two fortnights of October (28 September – 25 October). As long as the wage conditions are satisfied by 31 October you can still claim JobKeeper for those two Fortnights. Therefore, there is some time to work through the legislation. If you need help reach out.
- You will still need to determine your Actual GST Turnover by 14 October (the deadline for the JobKeeper declaration for the month of September), however this is after the end of the first Fortnight which ends on 11 October.
I didn’t qualify for JK1.0 can I now qualify for JK2.0?
- Yes, an entity can qualify for JK2.0 if it meets all the eligibility criteria which existed for JK1.0 (e.g. carrying on a business with an ABN as at 1 March 2020).
- It then will need to determine its Actual GST Turnover for the September Quarter and determine that it is 30% less than the same period last year.
- Once confirmed, the entity will need to enrol into JobKeeper program online before the end of the first month in which it intends to start claiming. It will then follow the same steps as outlined above for JK2.0 eligible entities.
These rules are complicated, our team is here to help. Please call or email The Macro Group if you require our assistance or wish to further discuss any aspect of these rules.
Date Published: 29 September 2020