Extending the JobKeeper payment – what it means to you

Valorium Advisors welcomes the Australian Government’s decision to extend the JobKeeper Payment beyond its original timeframe. This is as a necessary safety net for employers and their employees in some of the most vulnerable industries.

The six-month extension of the JobKeeper Payment will last until 28 March 2021. It continues the economic support provided to businesses significantly impacted by the Coronavirus pandemic.

Many of our clients in the hospitality, health and beauty, and trades industries have relied heavily on JobKeeper. And the scheme has allowed them to retain staff throughout this difficult period. Extending the JobKeeper Payment for an additional six months will provide those clients some peace of mind.

However, it does come with some changes to eligibility and a reduction in the payment rate provided to subsidise employee wages.

Employer eligibility

From 28 September 2020, organisations using JobKeeper need to demonstrate they have suffered a significant ongoing decline in turnover. This can be done using actual GST turnover as opposed projected GST turnover as is currently the case.

Businesses will need to reassess eligibility to continue to claim the subsidy using actual GST turnover in the 2020 June and September financial quarters for the period 28 September 2020 to 3 January 2021.

From 4 January 2021 until 28 March 2021, eligibility will be determined using actual GST turnover data. The 2020 June, September and December quarters will be assessed here. 

To qualify, all businesses and not-for-profits will still need to show they have experienced a decline in turnover of:

• 50 per cent for those with an aggregated turnover of more than $1 billion;
• 30 per cent for those with an aggregated turnover of $1 billion or less; or
• 15 per cent for Australian Charities and Commission-registered not-for-profits excluding schools and universities.

Comparable periods for determining the rate of decline are generally the corresponding quarters in 2019. The Commissioner of Taxation has discretion to set alternative tests to establish eligibility. This may be done in circumstances where it’s not appropriate to compare actual turnover in 2020 with 2019.

The Australian Tax Office’s advice on determining GST turnover can be found here.

New recipients will be able to claim JobKeeper if they meet both the existing requirements and additional turnover tests.

Employee eligibility

Extending the JobKeeper Payment for employees will also have new eligibility criteria applied from 28 September 2020.

Staff currently receiving JobKeeper Payment will continue to do so. However, the rate will no longer be the same for all employees.

To qualify for the full rate, employees need to have averaged 20 or more hours per week. This average needs to be consistent across the four pay periods prior to 1 March 2020. And those averaging less than 20 hours per week will be paid at a lower rate.

Sole trader and eligible business participants

The same criteria will also apply to sole traders, partnerships, beneficiaries of a trust, and shareholders/ directors of companies.

New JobKeeper Payment rates

The current rate of $1,500 per fortnight for eligible employees will remain until 27 September 2020. And after this, new rates of JobKeeper will come into effect.

Employees who work 20 or more hours per week will attract a $1,200 per fortnight government subsidy. This payment will reduce to $1,000 per fortnight on 4 January 2021. All other eligible staff will receive $750 per fortnight and then $650 per fortnight respectively.

The extension to the JobKeeper scheme is scheduled to end on 28 March 2021 for all employees.

So if you’d like to discuss the changes to JobKeeper, and how they will impact your business, contact us.