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JobKeeper Version 3.0


Leo Colgar
Leo Colgar

Jobkeeper benefit have been a lifeline for many since the day it was announced by the Prime Minister. However, it was a quick design that came with a lot of mistakes and damaging effect on the economy. It all began with the registration form that allowed some employers to enter 1,500 employees mistakenly; even though they meant 1, in their minds.

When the payments started, some people received it without being eligible in fact, some employees received a sudden pay rise while some others were literally forced to live on a much smaller amount then they normally earn.

And everyone was expecting it to come to an end in September. But the government surprised us when they announced an extension on 21 July, until next March.

First news is all enrolled participants have certainty until the end of September based on the existing rules. The JobKeeper wage subsidy program has been extended until March 2021, albeit at lower rates and with additional eligibility testing for small businesses and sole traders.

The extension beyond September is also welcome by masses for two reasons:

Firstly, it provides ongoing support for industries that are still impacted either directly or indirectly by restrictions put in place to curb the spread of COVID-19.

Secondly it becomes more targeted to those in need, as it re-establishes a decline in turnover eligibility test to maintain access to the fixed wage subsidy for both the December 2020 and March 2021 quarter.

After the announcement of Jobkeeper Version 2.0, the Government expanded the eligibility criteria for JKP (now referred to as 'JobKeeper 3.0'), on 7 August 2020, primarily in the wake of the tougher COVID-19 restrictions recently imposed in Victoria. The adjustments contained within JobKeeper 3.0 will apply nationwide, and the crucial amendments include the following:

  • Adjustments to employee eligibility - From 3 August 2020, the relevant date of employment (which is used to determine an employee's eligibility to JKPs) will move from 1 March 2020 to 1 July 2020. This is designed to increase employee eligibility for both the existing JKP scheme, as well as for the new extension periods from 28 September 2020.

Casual employees will still be required to have been employed on a regular and systematic basis for a minimum of 12 months (as is required under the existing JKP scheme).

  • Adjustments to the 'Decline in Turnover Test' - To qualify for the JKP in the extension periods, businesses will now only have to demonstrate that their actual GST turnovers have significantly decreased in the previous quarter under JobKeeper 3.0.

For these purposes, the applicable rate of decline in turnover required to qualify for JobKeeper 3.0 is determined in accordance with the existing rules (i.e., 50% for entities with an aggregated turnover of more than $1 billion, 30% for entities with an aggregated turnover of $1 billion or less and 15% for ACNC-registered charities).

Specifically, to be eligible for the JKP Extension Period 1 (i.e., from 28 September 2020 to 3 January 2021), businesses only need to demonstrate a significant decline in turnover in the September 2020 quarter, compared to 2019.

To be eligible for the JKP Extension Period 2 (i.e., from 4 January 2021 to 28 March 2021) businesses only need to demonstrate a significant decline in turnover in the December 2020 quarter, compared to 2019 again.

Importantly, the dual payment rate system originally proposed in JobKeeper 2.0 will remain, with the full rate of payment decreasing from $1,500 to $1,200 per fortnight from 28 September 2020 and then to $1,000 per fortnight from 4 January 2021. The proposed reduced rates (being $750 from 28 September 2020 and $650 from 4 January 2021) will also remain for employees and business participants who worked fewer than 20 hours per week in the relevant period.

Briefly,

$1,500 / fortnight continues until 27 September 2020, and then the payments will be grouped into two categories:

Period Full Time * Part Time
28 September 2020 to 3 January 2021 $1,200 $750
4 January 2021 - 28 March 2021 $1,000 $650

* Full time

  • Four weeks of pay periods prior to 1 March 2020 worked on average more than 20 hours / week
  • Active Business participant in the month of February 2020 worked more than 20 hours / week

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Published on by BiziNet

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Tel: 02 7200 2547
Website: www.brighttax.com.au
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