Background
Earlier this year the Australian Government announced the JobKeeper subsidy for eligible businesses who were significantly impacted by the Coronavirus. Businesses were provided $1500 per fortnight per eligible employee. However, on August 7th 2020, the Government introduced some changes to assist Australian employers into 2021. In this article, we break down the JobKeeper August update to help guide you and your business.
What Have Been the Changes to JobKeeper?
If you are receiving the JobKeeper payment, you will continue to receive these payments as normal until September 27th 2020. Meanwhile the Government has extended the payment to last up until March 28th 2021. However, it will not continue in the same way it has previously.
Employee Eligibility
The main update to the JobKeeper program relates to employee eligibility. From August 3rd 2020, employees will be eligible for the payment if they were employed as of July 1st 2020. This was moved from March 1st to widen the scope of employees who are able to receive the payment. However, all other employee eligibility criteria will remain the same.
Subsidy Amount
The update introduced a two-tiered payment system and reduced payment rates.
- September 28th 2020 to January 3rd 2021: The payment will be reduced to $1200 per fortnight for all eligible employees working 20 hours or more a week on average. Meanwhile, eligible employees working less than 20 hours per week on average will receive $750 per fortnight.
- January 4th 2021 to March 28th 2021: The payment will be reduced to $1000 per fortnight for eligible employees working 20 hours or more a week on average. Meanwhile, eligible employees working less than 20 hours per week on average will receive $650 per fortnight.
Employer Eligibility
Initially, to receive the payment, businesses had to show a fall in projected GST turnover (discussed below). However, with the update, they must demonstrate that they suffered a decline in their turnover using actual GST turnover. In order to receive the payment from September 28th to January 3rd 2021, eligible employers must reassess their eligibility with respect to the new test. In other words, they must show a decline in turnover using the new test for the June and September quarters of 2020. After this period, they need to reassess once again for the December quarter using the new test to be eligible for the payment from January 4th to March 28th 2021.
How To Sign Up For the Current Payment
Firstly, you should ensure that your business and your staff are eligible for the payment. An eligible employee is someone who is:
- Currently employed by the employer (including if they were re-hired or stood down). They must be either a full-time, part-time or a fixed-term employee as of March 1st 2020. Or, as of March 1st 2020, they were a long-term casual employee (working on a regular and systematic basis for at least 12 months).
- 18 years or older as of March 1st 2020
- An Australian resident 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.
Further, you need to satisfy the fall in turnover test. This test is to prove that your business has faced or will face, a:
- 30% fall in turnover (for an aggregated turnover of $1 billion or less)
- 50% fall in turnover (for an aggregated turnover of more than $1 billion), or
- 15% fall in turnover (for ACNC-registered charities other than universities and schools)
The next step is to enrol for the payment. You can do this using the Australia Taxation Office (ATO) portal on myGov. Alternatively, you can access it through the ATO business portal using myGovID. Or, if you have a tax or BAS agent, they can enrol for you. Finally, every fortnight, you must pay each eligible employee $1500, before tax, to claim the payment and be reimbursed.
Conclusion
If your business is in need of financial assistance, asses your eligibility for JobKeeper. If you have further questions or need assistance, speak to a business lawyer.
