On 21 July 2020 the Prime Minister announced the extension of the JobKeeper program through to March 2021. Importantly there are no changes to eligibility or payment levels for the period to the end of September 2020.

Beyond that, a two tiered scheme will be introduced with separate levels of payments being made for full and part time workers. Further, the turnover test will be strengthened by requiring an actual reduction in turnover of more than 30% in each of the June and September 2020 quarters in order for an employer to be eligible for JobKeeper in the December 2020 quarter. An employer will only be eligible for JobKeeper in the March 2021 quarter if it suffers the necessary decline in turnover for each of the June, September and December 2020 quarters.

What are the key changes?

  • Full time and part times workers treated differently: From the December quarter, JobKeeper will operate with two levels of payments. One for people who were full time employees pre COVID-19 and a lower level for part time employees. An employee will be eligible for the full time payment if they worked an average of 20 hours or more per week for the relevant employer in the four weeks ended before 1 March 2020. All other persons will be regarded as part time.
  • Payment levels are lower: For the December 2020 quarter, a full time worker will receive $1,200 per fortnight and a part time worker will receive $750 per fortnight. These levels will be further reduced to $1,000 for full time workers and $650 for part time workers in the March 2021 quarter.
  • Turnover decline retested: In order to be eligible for JobKeeper for the December 2020 quarter, an employer must suffer a greater than 30% decline in turnover for the June and September 2020 quarters as compared with the June and September 2019 quarters respectively. For the March 2021 quarter, they will also need to demonstrate a greater than 30% decline for the December 2020 quarter as compared to the same period in 2019.

Comment

The extension of JobKeeper is estimated to cost around $16.6 billion with the number of employees benefitting from the scheme reducing from the current 3.5 million to 1.4 million in the December 2020 quarter and then to 1 million for the March 2021 quarter.

Employers should review which tier of JobKeeper each of their current employees might be eligible for from October onwards.

The requirement for employers to pay their employees first and then claim JobKeeper back from the ATO remains. The new requirement that eligibility will depend upon actual turnover declines will mean that businesses need to have their financial records right up to date to confirm their eligibility from October onwards.

It now seems that a quarterly turnover comparison will be required irrespective of the BAS reporting period of the business.

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