11 November 2020
The JobKeeper payment scheme implemented by the government in response to the financial impact of the pandemic on businesses across the country has been extended with some amendments (JK 2.0 Scheme). While the scheme will be extended to 28 March 2021, eligibility will depend on actual turnover in the relevant periods, and payments will change to a two tier system. This will happen across two periods: 28 September 2020 – 3 January 2021 (First Period) and 4 January 2021 – 28 March 2021 (Second Period).
Changes include:
1. changed turnover eligibility tests;
2. amended JobKeeper directions; and
3. reduced rates.
Eligibility – Business
In addition to initial JobKeeper eligibility requirements, businesses will now need to meet a further decline in turnover test for the two periods of the extension.
Businesses need to show that their actual GST turnover has declined over the September and December 2020 quarters relative to a comparable period (generally the corresponding 2019 period) using the following guide:
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50% for those with an aggregated turnover of more than $1 billion;
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30% for those with an aggregated turnover of $1 billion or less; or
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15% for Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities).
The Commissioner of Taxation may also choose to set out alternative tests in specific circumstances where it is not appropriate to compare actual turnover.
Legacy Employers
There are now specific provisions for 'legacy employers' under JobKeeper 2.0. Legacy employers are those that received one or more JobKeeper payments under the initial scheme but who are no longer eligible under the new JK 2.0 Scheme.
Legacy employers will have access to modified work flexibilities for a further 6 month period provided they can show a decline in revenue of at least 10%. To show this decline, employers must obtain a written certificate from a financial services provider which confirms that the employer satisfied the 10% decline in turnover test. Employers with fewer than 15 employees need only provide a statutory declaration to show a 10% decline.
Under the JobKeeper 2.0 Scheme, legacy employers may avail themselves of flexibility provisions such as:
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JobKeeper enabling stand down directions (though different directions than under JK1.0);
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Changing employee duties;
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Changing employees' locations of work; and
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Changing employees' days of work.
Directions issued by legacy employers must not result in an employee working less than 60% of their ordinary hours, or less than 2 consecutive hours on any day.
Additionally, employees must be provided with 7 days' notice of a direction (increased from 3 days), during which time the employer must consult with their employee(s) and their representative (if any) about the direction. Consultation must include:
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information about the nature of the direction;
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information about when the direction is to take effect;
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information about the expected effects of the direction on the employee; and
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an invitation to the employee(s) to give their views about the impact of the proposed direction on the employee(s).
These directions or agreements will cease to have effect if the employer fails the 10% decline in turnover test at the required testing times, which are 28 October 2020 or the start of 28 February 2021.
Eligibility – Employees
Employees will be eligible in the extension periods if they, amongst some other requirements:
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are currently employed by an eligible employer;
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worked for the eligible employer as:
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a full-time, part-time or fixed-term employee at 1 July 2020; or
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a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and who is not not a permanent employee of any other employer.
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Employees will be eligible for a payment of $1,200 per fortnight for the First Period and $1,000 per fortnight for the Second Period where they meet the requirements set out above and:
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worked in the business for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020; or
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were eligible business participants who were actively engaged in the business for 20 hours or more per week on average.
All other eligible employees and business participants who worked 20 hours or less during the periods will be eligible for the lower rate of $750 per fortnight across the First Period and $650 per fortnight across the Second Period.
Businesses must nominate which payment they are applying for, in respect of each employee.
For further information, please contact:
Kristy Peacock-Smith, Partner, Bird & Bird
kristy.peacock-smith@twobirds.com
