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JobKeeper Payment Extension

Legislation has now been passed to extend the JobKeeper Payments by a further six months to March 2021.  The extension is designed to provide further support targeting businesses and not-for-profits that continue to be significantly impacted by the Coronavirus.  The payment rate will be reduced and a lower payment rate will be introduced for those who work fewer hours.  

Key Points

  • The JobKeeper Payment scheme has been extended until 28 March 2021
  • From 28 September 2020:
      • Employers need to demonstrate that their actual GST turnover has fallen against a comparable period.
      • Tier 1 and tier 2 JobKeeper rates apply and are generally based on average hours worked by employees.
  • For the JobKeeper fortnights starting 28 September 2020 and 12 October 2020 only, the ATO are allowing employers until 31 October 2020 to meet the wage condition (see below) for all employees included in the JobKeeper scheme.
  • Employers do not need to re-enrol to claim payments in the first extension if they are already enrolled in JobKeeper. They just need to check their continuing eligibility and submit this information to the ATO online from 1 October 2020.
  • Employers will be required to provide the ATO with information about the payment tier they are claiming for each eligible employee or business participant in their November monthly business declaration.

Eligibility

From today, employers will need to demonstrate that their actual GST turnover for the September 2020 quarter has declined by at least 30 per cent relative to a comparable period (generally the corresponding quarter in 2019) to receive the wage subsidy until 3 January 2021.  

This means that businesses need to assess their actual turnover for the September 2020 quarter and should look to complete their September 2020 quarter business activity statement as soon as possible.  Doing so will ensure that business can confirm their eligibility and determine what payments need to be made to employees for the relevant fortnights.  Businesses should also look to assess their eligibility for the December 2020 quarter well advance of the BAS due date in February 2021.

In order to be eligible for the JobKeeper Payment from 4 January 2021 to 28 March 2021, businesses will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in the December 2020 quarter.

To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate that 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 Not for profits Commission-registered charities (excluding schools and universities).

Payment rates

For all eligible employees who were working in the business or not-for-profit for an average of 20 hours or more a week in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged in the business for an average of 20 hours or more per week; the payment rate of $1,500 per fortnight will be reduced to $1,200 per fortnight from 28 September 2020 and to $1,000 per fortnight from 4 January 2021.

For all other employees and business participants, the payment rate will be $750 per fortnight from 28 September 2020 and $650 from 4 January 2021.

Businesses and not-for-profits will be required to nominate which payment rate they are claiming for each of their eligible employees or business participants.

The JobKeeper Payment will continue to be made by the ATO to employers in arrears.  Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper Payment (before tax), based on the payment rate that applies to each employee.  This is called the wage condition.

We are here to help

If you need assistance with determining JobKeeper eligibility or lodgement of your monthly JobKeeper declaration, contact our friendly team today.