JobKeeper 2.0 rules released
Treasurer Josh Frydenberg has now registered the new rules governing the extension of the JobKeeper payments, with ATO guidance set to follow.
The Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020 legislative instrument was registered on Tuesday, setting out the decline in turnover test for the extension of JobKeeper to 28 March 2021 and the new two-tiered payment rates.
For the first extension period running from 28 September 2020 to 3 January 2021, employees who worked for 80 hours or more in the 28 day period before either 1 March 2020 or 1 July 2020 will receive $1,200 per fortnight, while all other employees will receive $750.
For the second period running from 4 January 2021 to 28 March 2021, the rate will drop to $1,000 per fortnight and $650 per fortnight, respectively.
Actual decline in turnover test
To qualify for the first extension period, businesses will need to satisfy the new actual decline in turnover test for the quarter ending 30 September.
A business with a turnover of $1 billion or less, will be required to demonstrate a decline of 30 per cent relative to its comparable quarter in 2019.
To qualify for the second extension period between 4 January 2021 and 28 March 2021, the actual decline in turnover test will need to be applied for the quarter ending 31 December 2020.
Some good news is, there has been confirmation that if you are not eligible in the from October to December 2019 quarter extension, but you see a drop of 30% during the December quarter, you will be able to come back into JobKeeper from January 2021.
Determining higher or lower rate
How do we work out whether employees are on Tier 1 or 2?
Using the 28 days ending at the end of the pay cycle that finished immediately before 1 March 2020 or 1 July 2020.
The hours include actual hours worked, and any hours for which the employee received paid leave, including annual, long service, sick, carers and other forms of paid leave, or paid absence for public holidays.
For eligible business participants, the test to determine which rate to apply will instead be based on the assessment of the hours that the business participant was actively operating the business or undertaking specific tasks in business development and planning, regulatory compliance or similar activities during February 2020.
Businesses will be required to notify their employees whether they qualify for the higher or lower rate within seven days of completing the application.
What we don’t know yet:
Alternate testing rules. This covers new business, new business acquisitions and mergers, the list goes on. More to come on this
Answers to a lot of the “what if” questions if an employee was not working their normal hours in the 28 days prior to March & July 2020. What if they were on maternity leave, what if they are now working more hours than they used to. More to come on this one too.
What do we do with payroll between the 27th of September and the 1st of October? Good question! We are assuming there will be a catch up period for the first fortnight of JobKeeper 2.0 as some businesses will not know if they qualify until after the 30th of September.
What we do know:
There will be no need to reapply for JobKeeper 2.0.
We will need to notify both the employees and the ATO what Tier each employee covered by JobKeeper 2.0 qualifies for
There is no requirement to de-register for JobKeeper if you are not eligible post September 27th. Businesses simply stop completing the monthly declaration
There is no requirement for employees to fill out another Employee Nomination form, employers just need to notify them what Tier they qualify for
Some of the Fairwork JobKeeper provisions remain in place for employers in JobKeeper 2.0. The annual leave provisions have been removed. This means you can no longer request employees take leave at half pay or instruct them to take leave to bring their balance to 2 weeks
Legacy employers will be created. This is for employers who were a part of JobKeeper 1.0 however did not qualify for JobKeeper 2.0. If they have a 10% declined, there will be modified provisions.
GST turnover will be tested by the same means as your complete your BAS (i.e if you complete a cash basis BAS, your decline test MUST be on a cash basis)
We are going to take the next couple of days to digest these changes and come back to our clients with a specific plan for their business.