The JobKeeper scheme has now been extended from 28 September 2020 until 28 March 2021.
A concise pictorial summary of the Extension is available here
There are two separate extension periods. For each extension period, an additional actual decline in turnover test applies and the rate of the JobKeeper payment is different. Additionally, you must allocate sales in the same way those sales are reported on a business activity statement (BAS) if you were registered for GST (this was not necessarily the case in JobKeeper 1.0).
The extension periods are:
Extension 1 : from 28 September 2020 to 3 January 2021
Extension 2: from 4 January 2021 to 28 March 2021
JobKeeper extension 1
You will need to show that your actual GST turnover has declined in the September 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019).
JobKeeper extension 2
You will need to show that your actual GST turnover has declined in the December 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019).
Rates
JobKeeper Payment rates for employees will change based on the total hours worked during their reference period (either 4 weeks prior to 1 March or 1 July as applicable) and employers will need to nominate the rate being claimed for each eligible employee and business participant.
The rates of the JobKeeper payment in extension period 1 are:
Tier 1: $1,200 per fortnight (before tax)
Tier 2: $750 per fortnight (before tax).
The rates of the JobKeeper payment in extension period 2 are:
Tier 1: $1,000 per fortnight (before tax)
Tier 2: $650 per fortnight (before tax).
The rate of the JobKeeper payment will depend on the number of hours:
an eligible employee works, or
an eligible business participant is actively engaged in the business.
Tier 1 rate:
This rate applies to:
eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and
eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration to that effect.
Tier 2 rate:
This rate applies to:
any other eligible employees and eligible business participants.
Alternative tests for determining the payment rates that apply to an eligible employee, eligible business participant or eligible religious practitioner may be available in some circumstances.
Actual decline in turnover test
For JobKeeper fortnights from 28 September 2020 you will need to meet an actual decline in turnover test. The actual decline in turnover test is similar to the original decline in turnover test. However:
it must be done for specific quarters only (no longer an option to assess based on monthly turnover)
you must use actual sales made in the relevant quarter, not projected sales, when working out your GST turnover
you must allocate sales to the relevant quarter in the same way you would report those sales to a particular business activity statement if you were registered for GST.
You can satisfy the actual decline in turnover test in two ways:
the basic test; or
the alternative test.
Generally, businesses will use the basic test, which is based on GST turnover. Importantly though, the alternative test remains available for some cases where the normal comparison period is not appropriate.
What doesn't change
To claim for fortnights in the JobKeeper extension 1 or 2:
You don't need to re-enrol for the JobKeeper extension if you are already enrolled for JobKeeper for fortnights before 28 September.
You don’t need to reassess employee eligibility or ask employees to agree to be nominated by you as their eligible employer if you are already claiming for them before 28 September.
You don't need to meet any further requirements if you are claiming for an eligible business participant, other than those that applied from the start of JobKeeper relating to
holding an ABN, and
declaring assessable income and supplies.
What you need to do
From 28 September 2020, you must do the following:
work out if the tier 1 or tier 2 rate applies to each of your eligible employees and/or eligible business participants and/or eligible religious practitioners
notify the ATO and your eligible employees and/or eligible business participants and/or eligible religious practitioners what payment rate applies to them
during JobKeeper extension 1 – ensure your eligible employees are paid at least
$1,200 per fortnight for tier 1 employees
$750 per fortnight for tier 2 employees
during JobKeeper extension 2 – ensure your eligible employees are paid at least
$1,000 per fortnight for tier 1 employees
$650 per fortnight for tier 2 employees.
New JobKeeper participants
The JobKeeper scheme will remain open to new participants, provided they meet the eligibility requirements for the relevant period.
Further factual information from the ATO is available here
For more information or assistance please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au