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JobKeeper 2.0 explained

On 21 July the Federal Government announced an extension of the JobKeeper Payment by a further six months to March 2021.

The original JobKeeper Payment (JobKeeper 1.0) will continue until 27 September. JobKeeper 2.0 will run from 28 September to 28 March 2021.

You may be eligible for JobKeeper 2.0 even if you were ineligible for JobKeeper 1.0 and you can enrol until the program ends if your circumstances have changed, for example, Victorian businesses limited operations due to restrictions.

This information sheet outlines the changes to the JobKeeper Scheme as a result of its extension.

Q. What is JobKeeper 2.0?

Similar to JobKeeper 1.0, JobKeeper 2.0 will provide eligible employers a wage subsidy for eligible employees, however changes have been made in relation to:

  • The amount of the subsidy (Payment Rate),
  • Who is an eligible employee, and 
  • The application of the ‘turnover test’.

As was the case with JobKeeper 1.0 employers will be required to pass those payments directly onto eligible employees as wages or as a subsidy to their wage.

Under JobKeeper 2.0 eligible employers remain able to issue JobKeeper enabling directions to temporarily provide greater flexibility around hours of work through JobKeeper enabling stand down direction or changes to the performance of duties or the location of work.

An eligible employee must not unreasonably refuse an employers request to make a JobKeeper enabling direction.

If you are not eligible for JobKeeper 2.0 but issued JobKeeper enabling directions under JobKeeper 1.0 changes have been made so that these directions can remain in place subject to the employer being able to demonstrate a 10 percent decline in actual turnover.

Q. How has the Payment Rate changed under JobKeeper 2.0?

The subsidy of $1,500 per fortnight will be reduced.

From 28 September to 3 January 2021 the JobKeeper payment will be:

  • $1,200 per fortnight for:
    - all eligible employees who work 20 hours or more a week on average in the 28-day period concluding at the end of the employees most recent pay period before either 1 March 2020 or 1 July 2020 (the one with the higher number of hours should be used), and
    - for business participants* who were actively engaged in the business for 20 hours or more per week on average during February 2020; and
  • $750 per fortnight for other eligible employees and business participants*.

From 4 January 2021 to 28 March 2021, the JobKeeper payment will be:

  • $1,000 per fortnight for:
    - all eligible employees who work for 20 hours or more a week on average in the 28-day period concluding at the end of the employees most recent pay period before either 1 March 2020 or 1 July 2020 (the one with the higher number of hours should be used), and
    - for business participants* who were actively engaged in the business for 20 hours or more per week on average during February 2020; and
  • $650 per fortnight for other eligible employees and business participants.

*A business participant is a sole trader, partner in a partnerships, beneficiary of a trust or a shareholder or director of a company.

JobKeeper 1.0 JobKeeper 2.0
Eligible employees average hours worked in 28 days before 1 March 2020 or 1 July 2020 30 Mar 2020 - 27 Sept 2020 28 Sept 2020 - 3 Jan 2021 4 Jan 2021 - 28 Mar 2021
More than 20 hours $1,500 per fortnight
$1,200 per fortnight $1,000 per fortnight
Less than 20 hours $750 per fortnight $650 per fortnight

Q. Who is eligible for JobKeeper 2.0?

Employers

Under JobKeeper 2.0 a business will be eligible for the subsidy if your business has a turnover of less than $1 billion you can demonstrate that your turnover has declined by 30 per cent in one or both of the two periods set out below.

Any business wishing to become eligible for JobKeeper 2.0 must assess their turnover to ensure it meets the new requirements set out below. This applies even if you are already receiving JobKeeper 1.0.

To be an eligible employer for payments from 28 September 2020 to 3 January 2021:

  • You must be able to demonstrate a decline is actual GST turnover of at least 30 percent in the September quarter (July, August, and September) compared to the same period in 2019.

To be eligible for payments from 4 January 2021 to 28 March 2021 you must reassess your turnover:

  • You must be able to demonstrate a decline is actual GST turnover of at least 30 percent in the December quarter (October, November and December) compared to the same period in 2019.

Employers with a turnover of $1 billion or more are also eligible if your actual GST turnover will be reduced by more than 50 per cent relative to a comparable quarters a year ago.

The self-employed including sole traders, partners in a partnership and beneficiaries of a trust who take their income as drawings (as opposed to wages) are also eligible if they meet the turnover tests outlined above for employers.

Businesses that are in liquidation and partnerships, trusts and sole traders in bankruptcy are ineligible.

Employees (this will generally include company directors)

Once a business is considered an eligible employer, your employee’s eligibility will be determined by whether or not they were eligible under Job Keeper 1.0 and when they were employed.

  1. Ongoing eligible employees

    Those employees that were in receipt of JobKeeper 1.0 and continue to remain eligible under the JobKeeper 1.0 criteria and are employed by the same employer.

  2. Employees eligible between 1 March and 2 August 2020 (criteria under JobKeeper 1.0) include those:
    • that are currently employed and were employed on or before 1 March 2020 (including those stood down or re-hired);
    • are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
    • were at least 18 years old on 1 March 2020;
    • were 16 or 17 on 1 March 2020 and are independent or not undertaking full time study;
    • are an Australian citizen, the holder of a permanent visa, a protected category visa who has been residing continually in Australia for 10 years or more;
    • were an Australian resident for tax purposes on 1 March 2020; and
    • are not in receipt of a JobKeeper Payment from another employer.
  3. New employees may be eligible for payments from 3 August 2020 if:
    • that are currently employed and were employed on or before 1 July 2020 (including those stood down or re-hired);
    • are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
    • were at least 18 years old on 1 July 2020;
    • were 16 or 17 on 1 July and are independent or not undertaking full time study    
    • were either:
      - an Australian citizen, the holder of a permanent visa, a special category visa holder or who has been residing continually in Australia for 10 years or more; or
      - an Australian resident for tax purposes on 1 March 2020; and
    • are not in receipt of a JobKeeper Payment from another employer.

Q. How do I establish a fall in turnover?

To demonstrate that you have faced the relevant fall in turnover, you will be expected to establish that your turnover has actually declined by 30 percent in the relevant quarter (relative to your turnover in a corresponding quarter a year earlier).

Turnover is calculated as it is for GST purposes, and is reported on Business Activity Statements. It includes all taxable supplies and all GST free supplies but not input taxed supplies.

If you were not in business a year earlier, or your turnover a year earlier is not representative of your usual or average turnover, (for example, because you were scaling up, or you turnover is typically highly variable), the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that you have been adversely affected by the impacts of the Coronavirus.

The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances.

Example: Dean runs a building business and started claiming the JobKeeper Payment for his eligible employees and himself as a business participant when the scheme commenced on 30 March 2020. At the time, Dean estimated that his projected turnover would be 65% below its actual turnover in April 2019. Dean submits his BAS on a monthly basis in July, August and September and his actual turnover declined 61% for the September quarter.

As the actual decline in turnover for the September 2020 quarter was greater than 30% and therefore Deans building business is eligible for JobKeeper 2.0 for the period of 28 September 2020 to 3 January 2021.

Applying for JobKeeper 2.0

Q. I am already enrolled for JobKeeper 1.0 – do I need to re-enrol if I remain eligible under JobKeeper 2.0?

No you will not need to re-enrol for JobKeeper 2.0 if you were already enrolled for JobKeeper 1,0 before 28 September 2020.

You will be required to:

  • Re-assess your eligibility for JobKeeper 2.0 with reference to your actual turnover in the September (and December) quarter by demonstrating that you have met the relevant turnover test. It is understood that the required monthly business declarations will allow you to confirm that you remain eligible and meet the relevant test.
  • If you are eligible for JobKeeper 2.0:
    - Notify the ATO in the approved form regarding the applicable pay rate under JobKeeper 2.0.
    - Notify your employee of the applicable pay rate within 7 days of providing this notice to the ATO.

Q. If I was not receiving JobKeeper 1.0 how do I apply for JobKeeper 2.0?

Employers

  1. Employers must enrol for the JobKeeper Payment.
  2. Employers will need to identify and manage eligible employees.

For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business

Businesses without employees

Businesses without employees, such as the self-employed, are also eligible and can enrol.

Businesses without employees will need to:

  • provide an ABN for their business,
  • nominate an individual to receive the payment and provide that individual’s Tax File Number; and
  • provide a declaration as to recent business activity.

People who are self-employed will need to provide a monthly update to the ATO regarding their turnover to declare their continued eligibility for the payments.

Payments will be made monthly to the individual’s bank account.

Q. Is there anything I need to do once I have been deemed eligible for the payment?

Yes, as an eligible employer you must:

  1. Ensure that each eligible employee receives at least the appropriate amount per fortnight (before tax).
  2. Notify all eligible employees that they are receiving the JobKeeper Payment.
  3. Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

You must make a monthly declaration between the 1st and 14th day of each month. For example, the business monthly declaration for the JobKeeper Payments paid to employees in October need to be completed by 14 November.

Payment of JobKeeper 2.0

Q. When will I receive the JobKeeper Payment?

Payment are made to an employer monthly in arrears by the ATO.

In order to remain eligible, an employer must pay their eligible employees on or before the end of the relevant JobKeeper fortnight.

For the first 2 JobKeeper fortnights under JobKeeper 2.0 (28 September – 11 October and 12 October – 25 October) JobKeeper fortnight, your eligible employee must be paid their full wage by 31 October. For fortnights after 26 October, you eligible employee/s must be paid by the end of the fortnight i.e. 8 November.

Q. If I am eligible for the JobKeeper Payment under JobKeeper 2.0 do I need to continue to pay my employees their full wages?

Yes, if your business is still operating and your employee is still working.

Example: Your site supervisor Joe earns $3,000 per fortnight before tax. You will receive $1,200 per fortnight from the JobKeeper Payment to subsidise Joe’s salary. You should continue to pay superannuation of Joe’s income.

Q. What if my employee earns less than the applicable rate under JobKeeper 2.0?

If your employee has been receiving less than this amount, you will need to top up the payment to the employee up to the applicable amount, before tax.

Example: Your receptionist Anne earns $1,000 per fortnight before tax. You will be required to pay Anne an additional $200 per fortnight before tax totalling $1,200 per fortnight before tax.

You will receive $1,200 per fortnight before tax from the JobKeeper Payment which will subsidise Anne’s salary.

The business must continue to pay the superannuation guarantee on the $1,000 per fortnight of wages that Anne is earning. The business has the option of choosing to pay superannuation on the additional $200 (before tax) paid to Anne under the JobKeeper Payment.

Q. What if my employee is part time?

If your employee works less than 20 hours per week on average then for the period 28 September 2020 - 3 January 2021 you receive a payment of $750. If you remain eligible for the 4 January 2021 - 28 March 2021 you will receive a payment of $650.

Regardless of how many hours your part time employee works they must receive a minimum of, for example, $750. If their hourly rate means they earn more than $750 per fortnight, you must pay them the entirety of the wages they earn.

What else should I know?

Q. I have terminated my employees – What should I do?

If your business is still operating and your employee was employed at 1 March 2020 or 1 July 2020 you could consider re-hiring your employee under the same, similar or different arrangement. For example, you may wish to re-hire a previously full time carpenter on a part time basis or some other basis in accordance with a JobKeeper enabling direction (see below).

Be aware that:

  • Employees who have been terminated may be seeking/receiving the JobSeeker Payment. If the employee is rehired, these payments would cease and the employee would receive the JobKeeper Payment instead.
  • Once re-hired all applicable entitlements will accrue and be available to the employee, for example annual leave and personal leave.
  • You will also need to make superannuation payments.
  • If you have made an employee redundant, a decision to re-hire that employees starts the employment relationship anew. i.e. you cannot ask that the employee return any redundancy payments or other payments related to the ending of that employment.

Q. Are there any obligations on employees?

Yes your employee/s must:

  • notify their principal employer if they have multiple employers.
  • if not an Australian citizen notify you of their visa status to allow you to determine if they are an eligible employee.
  • notify Services Australia if they are currently in receipt of an income support payment.

Q. Are there any record keeping requirements?

Yes. An eligible employer must keep records to substantiate any information that was provided to the ATO for 5 years.

Q. What if I get paid JobKeeper when I should not have?

If you receive a JobKeeper Payment that you were not entitled to or that is more than the correct amount that it was entitled to you will be required to repay the overpaid amount.

A General Interest Charge (GIC) will be charged from the date that the overpayment occurred i.e. that the JobKeeper payment was made.

There will be a discretion to waive the requirement to repay an overpaid amount in circumstances where an honest mistake was made with no personal benefit.

Flexible work arrangements - JobKeeper enabling directions

As part of JobKeeper 2.0 the temporary flexibilities continue to apply with some minor modifications.

Some flexibilities also remain available to employers who received JobKeeper 1.0 and issued JobKeeper enabling directions but are no longer eligible for JobKeeper 2.0.

Q. What is a JobKeeper enabling direction?

A JobKeeper enabling direction provides employers and employees eligible for the JobKeeper Payment the ability to:

  • Issue a JobKeeper enabling stand down direction.
  • Make changes to hours of work, the performance of duties and the location or work.

These directions must be not be unreasonable in all of the circumstances. What is “unreasonable in all of the circumstances” is a very broad test and requires a consideration of anything relevant including the personal circumstances of the employee concerned.

Q. What flexibilities are no longer available that were available under JobKeeper 1.0?

From 28 September flexibility in relation to the taking of annual leave is no longer available.

An employer will no longer be able to:

  • request an employee take accrued annual leave (which the employee must not unreasonably refuse); and
  • agree with employees for double annual leave to be taken at half pay.

There may be other flexibilities regarding the taking of annual leave under the application Modern Award.

Q. Can I still rely on a JobKeeper enabling direction if I am ineligible for JobKeeper 2.0?

Yes, if you are a Legacy Employer.

A Legacy Employer is an employer who:

  • qualified for JobKeeper 1.0 prior to 28 September; and
  • does not qualify for JobKeeper 2.0; and
  • can show a 10 per cent decline in current turnover.

If you currently have a direction in place, but are a Legacy Employer any existing directions will automatically cease to have effect from 28 September. Any directions will need to be reissued and comply with the rules relating to the directions that Legacy Employer can issue and notification and consultation requirements.

Q. If I am a Legacy Employer what type of JobKeeper enabling directions can I issue?

From 28 September a Legacy Employer can issue JobKeeper enabling directions relating too:

  • Changes to the current employment arrangements. An employer may require an employee to:
    - Work at least 60 percent of the employees ordinary hours as at 1 March 2020. The employee must work at least 2 consecutive hours in a day.
    - Work at an alternative location; or
    - Undertake alternative duties.

An employer can also request that the employee work different days/times to their ordinary hours/days (as long as the agreement does not require the employee to work less than 2 consecutive hours in a day). This request cannot be unreasonably refused.

Q. How do I demonstrate a 10 percent decline in turnover?

The 10 percent decline in current turnover test requires that:

  • Between 28 September and 27 October 2020, a Legacy Employer must have a 10 percent decline in turnover certificate or self-certify the decline in turnover for the June quarter (April, May and June) compared to the June quarter 2019.
  • Between 28 October and 27 February 2021, a Legacy Employer must have a 10 percent decline in turnover certificate or self-certify the decline in turnover for the September quarter (July, August and September) compared to the September quarter 2019.
  • Between 28 February 2021 and 28 March 2021, a Legacy Employer must have a 10 percent decline in turnover certificate or self-certify the decline in turnover for the December quarter (October, November and December) compared to the December quarter 2019.

These dates align with the BAS lodgement dates.

You must obtain a 10 percent decline in turnover certificate/self-certify for each subsequent quarter to continue to be eligible.

In order to prove the decline a business must:

  • Obtain a 10 percent decline in turnover certificate for a financial service provider; or
  • If they choose to, self-certify where the employer is a small business with less than 15 employees.

Q. Which financial service provides can issue a decline in turnover test certificate?

  • A registered tax agent, BAS agent; or
  • A qualified accountant.

A financial service provider does not include directors, employees or an associated entity of the employer.

Q. How do small businesses self-certify?

The declaration must be made by an individual who either is, or is authorised by the employer and who has knowledge of the financial affairs of the business.

Q. I was eligible for JobKeeper 1.0 and I am also eligible for JobKeeper 2.0 - What steps do I need to take to extend a JobKeeper enabling direction that was issued prior to 28 September 2020?

Any directions in place prior on 27 September will automatically carry over from 28 September if you remain eligible to give that direction.

It is however recommended that you review any directions issued.

Q. Under JobKeeper 2.0 how do I give a JobKeeper enabling direction?

Before giving a JobKeeper enabling direction an eligible employer must:

  1. Provide notice in writing at least 3 days before you intend to give a direction.
  2. Consult with the eligible employee/s about the proposed direction.
  3. Keep a written record of the consultation.
  4. Once you have decided to make a direction you must provide that direction in writing.
  5. Ensure that if making changes to an employee’s duties or work location you have information to support a reasonable belief that the direction is necessary to continue the employment of one or more employees. This belief must be:
    - Based on “information”. This cannot be a simple whim or a view based on nothing. There needs to be some form of factual material before the employer; and
    - Reasonable. The belief must be available on the information the employer has before them and needs to be reasonably available; and
    - Necessary to maintain the employment of the employee, for example, but for you doing this (directing different duties or a different work location) the employee would be made redundant. This is a quite high test and requires more than the JobKeeper direction being desirable or preferred but “necessary” to avoid this.

Any disputes regarding a JobKeeper enabling direction can be dealt with by the Fair Work Commission.

Q. I am a Legacy Employer – how do I issue a JobKeeper enabling direction?

Before a Legacy Employer gives a JobKeeper enabling direction you must:

Consult at least 7 days before you intend to give the direction:

  • Provide written notice of the employers intention to give the direction.
  • Keep a written record of the consultation.
  • Provide the employee with information about the proposed direction.
  • Invite the employee to give their views about the impact of the proposed direction on the employee. Employers must give prompt and genuine consideration to these views.

For each quarter that you wish the directions to apply to you must notify employees before 28 October 2020 and 28 February 2021 regarding whether a direction/request currently in operation will either:

  • Continue to apply as a result of the employer continuing to satisfies the 10 percent decline in turnover test; or
  • Will cease to apply on the basis that the employer no longer satisfies the 10 percent decline in turnover test.

Q. What is a JobKeeper enabling stand down direction?

Different requirements apply if you are eligible for JobKeeper 2.0 or if you a Legacy Employer.

JobKeeper 2.0

An eligible employer may issue a JobKeeper enabling stand down direction to an eligible employee to:

  • not work on particular days,
  • work for a lesser period or for fewer hours than the employee would ordinarily work, or
  • work no hours.

The employee is not to be paid for work that is not performed.

This direction can only be issued if:

  • The employee cannot be usefully employed for their normal days or hours because of changes to the business attributable to COVID-19, or government initiatives to slow the transmission of COVID-19; and
  • Can be implemented safely, having regard to the nature and spread of COVID-19.

A JobKeeper enabling stand down direction cannot reduce an employee’s hourly rate of pay.

Legacy Employer

A Legacy Employer may issue a JobKeeper enabling stand down direction to an eligible employee to work a reduced number of hours or days to a minimum of 60 per cent of an employee’s ordinary hours (as assessed on 1 March 2020) but cannot result in an employee working less than two consecutive hours in a day that they work.

The employee is not to be paid for work that is not performed.

This direction can only be issued if:

  • The employee cannot be usefully employed for their normal days or hours because of changes to the business attributable to COVID-19, or government initiatives to slow the transmission of COVID-19; and
  • Can be implemented safely, having regard to the nature and spread of COVID-19.

A JobKeeper enabling stand down direction cannot reduce an employee’s hourly rate of pay.

An employees ordinary hours at 1 March are the ordinary hours that the employee has been contracted to do, not the actual hours the employee did or did not work.

How do I know an employee cannot be usefully employed?

This situation arises when an employee has no (or a reduced level of) useful work available to perform because of the COVID-19 pandemic or because of the Public Health Orders and Directions (however described in each State and Territory) imposing restrictions on individuals and businesses.

Useful work does not have to be the work that the employee ordinarily performs but needs to be genuine productive work that provides a benefit to the employer. You should be able to demonstrate that the impacts of the virus or the Government’s measures to deal with it have caused the fact that there is none, or less useful, work available.

When does a stand down direction not apply?

A stand down direction does not apply to the employee during a period when the employee is:

  • Taking paid or unpaid leave that is authorised by the employer.
  • Otherwise authorised to be absent from the employee’s employment

I have already stood down my employees – am I eligible for the JobKeeper Payment?

Eligible employers who stood down their employees before the commencement of the scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will be eligible.

Q. What is a JobKeeper enabling direction regarding the performance of duties and the location of work?

Performance of duties

An eligible employer may direct an eligible employee to perform any duties that are:

  • within the employees skill and competency;
  • safe to be performed having regard to COVID-19;
  • if a qualification is required to carry out that work, that the employee has the required license or registration; and
  • reasonably within the scope of the employers business operations.

Example: McMansion Building Services employs Pete, who is a carpenter. Due to a downturn in activity as a result of COVID-19 Pete is no longer needed to perform carpentry work. Instead, McMansion Building Services needs more staff carrying out final site inspection due to homeowners wanting to move into their new homes quicker. Pete is comfortable with performing final inspections and agrees to the change in duties.

Location of work

An eligible employer may direct an eligible employee to perform duties at a difference place from the employees normal place of work if:

  • the place is suitable for the employees duties; and
  • if the place is not the employees home, the place does not require the employee to travel a distance that is unreasonable in all the circumstances including COVID-19; and
  • the performance of the employees duties at the place is:
    - Safe having regard to the nature and spread of COVID-19; and
    - Reasonably within the scope of the employer’s business operation.

In the normal course of a day those in the residential building industry may already work on multiple sites per day. The above might be relevant for, for example a work, health and safety manager who is asked to carry out site inspections at various locations.

Q. Does service continue to accrue?

An employee’s period of service, i.e. the period of employment with the employer, will continue as if no direction was issued. This means that an employee will continue to accrue annual leave, personal leave and long service leave. The following are also to be calculated as there was no direction:

  • Redundancy pay.
  • Payment in lieu of notice of termination.

Further information

The Federal Government and ATO has released the following information to assist businesses understand the scheme:

Contact a HIA Workplace Adviser

1300 650 620

or email enquiry@hia.com.au

Current at: 25 September 2020
HIA ref no: NFSIRE1369