JobKeeper and JobSeeker Changes – What you need to know
The Australian Government announced that JobKeeper and JobSeeker payments will be extended, with changes starting on 28 September 2020. Below is a rundown of the changes to expect on these support schemes.
Changes to JobKeeper
The JobKeeper scheme will continue until 28 March 2021. The extension of the scheme will operate in two separate periods:
- Extension 1: 28 September 2020 to 3 January 2021
- Extension 2: 4 January 2021 to 28 March 2021
JobKeeper Extension 1
The tier 1 payment rate of $1,200 per fortnight applies to:
- Employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020
- Eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration.
For any other eligible employees or business participants, the tier 2 payment rate of $750 per fortnight will apply.
JobKeeper Extension 2
For extension 2, payment rates will be further reduced to:
- $1,000 per fortnight for tier 1 employees and business participants
- $650 per fortnight for tier 2 employees and business participants
The ATO website provides further information about the eligibility requirements for the extension 2 period.
Decline in Turnover Test
Both these extension periods will require satisfaction of an additional actual decline in GST turnover test as follows.
Extension 1 (28/09/2020 – 03/01/2021)
September Quarter (Jul, Aug, Sept) relative to comparable period (usually same 2019 Q)
Extension 2 (03/01/2021 – 28/03/2021)
December Quarter (Oct, Nov, Dec) relative to comparable period (usually same 2019 Q)
For further details about the eligibility requirements for the JobKeeper extension 1, please refer to the Australian Taxation Office (ATO) website.
How does this differ from the original JobKeeper test?
- The decline in turnover must be demonstrated for specific quarters only .
- Rather than using projected GST turnover for the relevant quarter being tested, you use your current GST turnover
- You must allocate sales to the relevant quarter in the same way you would report these sales to a BAS if you were registered for GST
- If you are not registered for GST, you will work out your turnover using either the GST cash or non-cash basis of accounting.
What you need to do
From 28 September 2020, you are required to:
- Determine your eligibility for the JobKeeper Extension scheme using the actual turnover test for the September quarter
- Determine if you have any new eligible employees that were not previously nominated for JobKeeper and ask them to agree to be nominated
- Work out the Tier 1 or Tier 2 rate of pay that you will be claiming for each eligible employee/eligible business participant
- Notify your eligible employees which payment rate is applicable for them
- Ensure your eligible employees/eligible business participants receive the correct rate of payment per fortnight during each of the JobKeeper Extension periods according to the two tiers of payment
- If you are registered for GST and have outstanding Business Activity Statements (BAS), ensure you lodge your BAS for the September 2019 and December 2019 quarters now (or for equivalent months, if you report monthly) so that you don’t hold up your application for the JobKeeper Extension Scheme
The required decline in GST turnover percentages will remain the same:
- 30% for an aggregated turnover of $1 billion or less
- 50% for an aggregated turnover of more than $1 billion
- 15% for ACNC-registered charities other than universities and schools.
What you do not need to do:
If you are already enrolled for the current JobKeeper Scheme for fortnights prior to 28 September 2020, you do NOT need to:
- Re-enrol for the JobKeeper Extension Scheme
- Re-assess eligibility for employees already receiving JobKeeper for the JobKeeper Extension Scheme or ask them to agree to be nominated
- Meet any further requirements if you are claiming for an eligible business participant, other than holding an ABN and declaring assessable income and supplies
The ATO has a useful one page fact sheet outlining the key changes, but please ask us if you have a question.
Changes in JobSeeker Payment
JobSeeker will continue until the end of December 2020, and then the government will review at the end of the year to assess if it needs to be extended further. Here are the changes in payment rates:
- COVID supplement of $550 per fortnight will be reduced to $250 from October until the end of the year, making the JobSeeker rate around $800 per fortnight.
- Those on this payment can earn up to $300 per fortnight without reducing their payment
Mutual Obligations to Return in 2 Phases
You will need to do the following to avoid penalties:
Phase 1 – August 4th
- Reconnect with employment services
- Undertake 4 job searches a month
- Take jobs where offered
Phase 2 – End of September
- The number of required job searches a month will be higher
- Take jobs where offered
In both Phase 1 and Phase 2, people will be given penalties if they do not take jobs offered.