On 1 September 2020, the Federal Government passed the Coronavirus Economic Response Package (JobKeeper Payments) Amendment Bill 2020 which has enabled the extension of the JobKeeper scheme. In this article we summarise the main points of the extended scheme, dubbed JobKeeper 2.0.
When the JobKeeper scheme was originally implemented in March 2020, it was expected to be available until 27 September 2020. Due to the continuing financial turmoil created by the global COVID-19 pandemic, the scheme has now been extended in two stages.
Stage 1: 28 September 2020 to 3 January 2020
To be eligible for continued support under the JobKeeper scheme from 28 September 2020 to 3 January 2021, businesses and not-for-profit enterprises will be required to show that they are suffering an ongoing significant decline in turnover by reference to actual GST turnover.
To do this, businesses will need to demonstrate the relevant decline in turnover by reference to their actual GST turnover in both the June 2020 and September 2020 quarters relative to comparable periods (which will generally be the 2019 corresponding quarters).
Stage 2: 4 January 2021 to 28 March 2021
To receive additional JobKeeper payments past 4 January 2021 until the end of the scheme on 28 March 2021, businesses and not-for-profits will again need to assess their eligibility.
To be eligible, they will need to demonstrate the relevant decline in actual GST turnover in each of the June 2020, September 2020 and December 2020 quarters relative to comparable periods in 2019.
Test: Relevant decline in turnover
As with the existing rules, the size of the required decline in turnover depends upon the size of the business. That is:
- 50 per cent decline in turnover for those businesses with an aggregated turnover of more than $1 billion;
- 30 per cent decline in turnover for those businesses with an aggregated turnover of $1 billion or less; or
- 15 per cent decline in turnover for ACNC registered charities.
Where an employer is not able to satisfy the above test due to a particular circumstance - for example, where the business was not operating in 2019, or where the business employs staff through a special purpose entity - an alternative test may apply.
As with the existing eligibility rules, a number of employers are specifically excluded from accessing the JobKeeper scheme including:
- Australian government and agencies;
- State and Territory governments and agencies;
- local governments;
- State-owned corporations;
- foreign governments and agencies;
- businesses in liquidation, or
- a partnership, trust or sole trader in bankruptcy.
Eligible employers will not be required to test the continuing eligibility of employees who are currently eligible under the existing regime. We previously wrote about the eligibility requirements for employees in our Short Guide available here.
However, additional employees may now be eligible for the revised JobKeeper scheme, including:
- those long-term causal employees who were not eligible on 1 March 2020, but have since become eligible by 1 July 2020;
- permanent (full time or part time) employees employed before 1 July 2020; and
- employees who were re-hired by 1 July 2020.
Notably, those employers who remain eligible for the JobKeeper scheme past 27 September 2020 will continue to have the right to issue JobKeeper enabling directions and requests to eligible employees (though exceptions apply to stand down and annual leave, further details below). Such directions include a direction to perform different duties or work from a different location. We provided a detailed description of JobKeeper enabling directions in our Short Guide.
Employers are required to provide employees seven days' notice when they intend on issuing a JobKeeper enabling direction.
For employers who will no longer be eligible for the JobKeeper scheme past 27 September 2020, any previously issued JobKeeper enabling directions will cease to have effect from that date. This means, for example, an employee who was previously directed to work reduced hours will need to have their usual hours returned from 28 September 2020.
However, one notable exception does apply to 'legacy employers'. Legacy employers are employers who were previously eligible for the JobKeeper scheme but are now no longer eligible. These employers can continue to rely on JobKeeper enabling directions where they are able to demonstrate a 10% decline in turnover in the following periods:
- the June 2020 quarter (April, May, June 2020) compared to the June 2019 quarter, in order to be eligible to use JobKeeper enabling directions until 27 October 2020;
- the September 2020 quarter (July, August, September 2020) compared to the September 2019 quarter, in order to be eligible to use JobKeeper enabling directions from 28 October 2020 to 27 February 2021; and
- the December 2020 quarter (October, November December 2020) compared to the December 2019 quarter, in order to be eligible to use JobKeeper enabling directions from 28 February 2021 to 28 March 2021.
For most businesses, demonstrating the relevant decline in turnover will require a certificate from an accountant (or a statutory declaration for small businesses with less than 15 employees).
JobKeeper stand down
Employers who remain eligible for the JobKeeper scheme past 27 September 2020 can continue to issue JobKeeper-enabled stand down directions to eligible employees.
Different rights apply, however, to legacy employers. Notably, legacy employers will not be able to issue stand down directions where the direction:
- reduces the employee's hours to below 60% of the employee's ordinary hours (determined as at 1 March 2020); or
- requires an eligible employee to work less than two consecutive hours on any one day.
Legacy employers who want to issue a JobKeeper enabled direction to stand down will need to provide the eligible employee(s) with seven days' written notice and comply with all additional consultation requirements.
Annual leave requests
The JobKeeper scheme, as enacted in April of this year, allowed eligible employers to request eligible employees to take annual leave. In these circumstances, employees could only refuse such a request on reasonable grounds. Notably, this right will cease on 28 September 2020.
Employers who wish to request their employees take annual leave after this time will need to do so in accordance with the Fair Work Act or any applicable modern award or enterprise agreement.
From 28 September 2020, the JobKeeper Payment rate will be reduced from $1,500 per fortnight to $1,200 per fortnight. The rate will again be reduced on 4 January 2021 to $1,000 per fortnight for the eligible employees of those employers who are able to demonstrate their continuing eligibility.
In addition, from 28 September 2020 different rates will apply to those employees and business participants who work fewer than 20 hours per week (on average). Employees and business participants working fewer than 20 hours per week will be entitled to $750 per fortnight between 28 September 2020 to 3 January 2021. That amount will reduce to $650 per fortnight from 4 January 2021 to 28 March 2021.
For further information please contact:
Emily Capener, Solicitor
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.