Technical Update:

JobKeeper extension turnover test eased

07 August 2020

On 7 August 2020 the Treasurer revealed that the recently announced tougher eligibility rules for the second phase of the JobKeeper payment scheme will be eased. Employers will now only have to demonstrate a reduction in turnover in the quarters ending in September and December 2020, compared to the same periods last year. From 3 August 2020, the test date of employment will also move from 1 March 2020 to 1 July 2020.

Eligibility for extension made easier

On 21 July 2020, the Federal Government announced the extension of the JobKeeper payment scheme (previously due to expire on 27 September 2020) until 28 March 2021 but with reduced rates and reapplication of the turnover tests requiring employers to show a fall in turnover in all the quarters since June 2020. Refer to this BDO Tax Technical Update for more detail on the changes.

On 7 August 2020, in light of the lockdown in Victoria commencing on 2 August 2020, further changes were announced to make it easier for employers to qualify for the JobKeeper payment scheme extension from 28 September 2020 and adjust the reference date for employee eligibility. Updated fact sheets are available on the Treasury website.

Turnover comparison periods

Businesses and not-for-profits must reapply and satisfy the turnover tests from 28 September 2020 and again on 4 January 2021 by demonstrating that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover).

To be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021 employers must reassess their eligibility with reference to actual GST turnover in the September quarter 2020 compared to the actual GST in the September quarter in 2019. In the 21 July announcement, the employer also had to show that they passed the relevant decline in turnover in June 2020 quarter. This additional test is no longer required.

To be eligible for the JobKeeper Payment from 4 January 2021 to 28 March 2021 reassessment of eligibility will be in reference to actual GST turnover in the December quarter 2020 compared to the actual GST in the December quarter in 2019. In the 21 July announcement, the employer also had to show that they passed the relevant decline in turnover in both the June and September 2020 quarters. This additional test is no longer required.

Date of employment expanded

From 3 August 2020, the relevant date of employment will move from 1 March 2020 to 1 July 2020, increasing employee eligibility for the existing scheme and the extension. The other conditions for eligibility of employees has not changed and are outlined in this BDO Tax Technical Update.

An eligible employee is an employee who:

  • is currently employed by the eligible employer (including those stood down or re-hired);
  • is employed either as a:
    • full-time or part-time employee, or
    • a casual employed on a regular and systematic basis for longer than 12 months as at 1 July 2020;
  • were aged 18 years or older at 1 July 2020 (if they were 16 or 17 they can also qualify if they are independent or not undertaking full time study);
  • were either an Australian resident (within the meaning of the Social Security Act 1991); or an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020; and
  • is not in receipt of any of the following payments during the JobKeeper fortnight: government parental leave; or a payment in accordance with Australian worker compensation law.

Reduced rates remain the same

The payment rate of $1,500 per fortnight for eligible employees and business participants will be reduced to $1,200 per fortnight from 28 September 2020 and to $1,000 per fortnight from 4 January 2021. From 28 September 2020, lower payment rates will apply for employees and business participants that worked fewer than 20 hours per week in the relevant reference period. Refer to this BDO Tax Technical Update for more detail on the reduced rates.

BDO Comment

BDO welcomes the easing of the eligibility for the extension of the JobKeeper payment scheme, as the previously announced basis was problematic for businesses that were on the verge of recovery but forced back into lockdown, as is presently the case in Victoria.

The change in date of employment to 1 July 2020 will also ensure that the JobKeeper payment scheme will be accessible for new employees, provided their employers satisfy eligibility requirements for the existing scheme and the extension.

These changes will apply to all Australian employers and employees, however it is anticipated a significant majority of the employers and employees that will benefit will be from Victoria owing to its lockdown. Contact BDO for assistance with applying for the JobKeeper payment scheme.

31 August due date for JobKeeper payments for new eligible employees

The deadline for satisfying the wage condition for newly eligible employees for JobKeeper fortnights in August is only one week away. To claim JobKeeper payments for JobKeeper fortnights, commencing 3 August 2020 and 17 August 2020, employers must ensure that all eligible employees, including those that have been newly nominated, are enrolled for JobKeeper by 31 August 2020.

Read our update for more information on the latest changes to JobKeeper - including ATO compliance activity.

Read More