THE JobKeeper scheme has been a godsend to many small businesses and their employees endeavouring to cope with the COVID-19 pandemic over the last few months.
While initially scheduled to end in late September, the federal Government recently announced an extension of the scheme to 28th March 2021.
The Government has also announced several important changes to the scheme, highlighted below:
Introduction of Two-Tier System and Changes to Payments:
Effective from September 28 a two-tiered system will be introduced, and eligible employees will be regarded as being in either the “high tier” or “low tier”;
- Eligible employees who worked 20 hours or more per week in the four weekly pay periods ending before March 1, 2020 will be in the high tier, and the payment amount reduced to $1,200 per fortnight (instead of the current amount of $1,500) until 3 January, 2021. After this, the payment will reduce again to $1,000 until the new March 28 end date.
- Eligible employees who worked less than 20 hours (on average) in the four weekly pay periods ending before March 1, 2020 will be deemed as being in the lower tier, and the payment amount reduced to $750 per fortnight until January 3, 2021. After this date, the payment will reduce further to $650 until March 28, 2021.
Important Changes to Business Eligibility
While the same JobKeeper criteria will continue to apply in terms of determining employee eligibility for JobKeeper, changes to business eligibility have been announced which will likely significantly reduce the number of businesses eligible for the scheme beyond September 28 (importantly, businesses currently eligible under the original criteria will remain eligible until at least the September 27).
- While the revenue shortfall requirements will remain the same (that is; businesses with an annual turnover of less than $1B can continue to claim if they have a revenue shortfall of 30% or more; businesses with an annual turnover of more than $1B can claim if they have a revenue shortfall of 50% or more, and; Registered charities and not for profits (excluding schools and universities) can claim if they have a revenue shortfall of 15% or more), the means by which businesses need to demonstrate the relevant shortfall is changing.
- Forecasting a decline in revenue will from the 28th September no longer be sufficient for a business to be eligible. Businesses will need to be able to demonstrate that they have experienced the relevant revenue decline in each quarterly period – namely both June (April, May, June) and September (July, August, September). Business eligibility will be reassessed at the end of September 2020 and again in January 2021 (with January tests also having to include proof of revenue loss in the final quarter of 2020 – October, November, December).
- For most businesses, the eligibility test will require them to demonstrate revenue decline compared to a comparable period (most likely the same period last year). The ATO will continue to have discretion to apply alternative tests in certain situations.
Other key features of the scheme remain the same (for example, payments will continue to be made by the ATO to eligible employers in arrears and employers must continue to pass on the full JobKeeper payments to eligible staff).
This article provides general information only and should not be relied upon as formal or legal advice.
Refer to the ATO website for further details or seek the advice of your accountant. Of course, HR Success can also provide additional info/support as required.
Greg Mitchell is the Principal Consultant/Owner of HR Success, which has been supporting businesses and organisations in Western Sydney for over 13 years. Visit www.hrsuccess.com.au for further information or make contact via ph. 1300 783 211 or email firstname.lastname@example.org for assistance with managing your team.