On 21 July 2020, the Government announced that the JobKeeper Payment (JKP) would be extended by a further six months to 28 March 2021 on a scaled-back basis, with businesses being required to re-assess their eligibility to remain in the scheme.
As employers will be required to re-assess their eligibility for the JobKeeper scheme whereby they must satisfy a new and modified version of the decline in turnover test, some employers who previously qualified for the scheme may no longer qualify after 27 September 2020. These employers are referred to as ‘legacy employers’.
Recent amendments have extended modified flexibilities under the FWA to legacy employers who are still experiencing at least a 10% decline in turnover. Importantly, these legacy employers will generally only be eligible for the FWA concessions where they have a ‘10% decline in turnover certificate’ issued by a registered tax agent, a BAS agent or a qualified accountant.
Subsequently, the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules 2020 legislative instrument was registered on 15 September 2020 (effective from 16 September 2020), setting out the new rules that will govern how the scheme will operate in the extension period (i.e., for JobKeeper 2.0).
Importantly, these Amending Rules do not replace the existing JKP rules, rather, they are an amendment to the existing rules to incorporate the previously announced dual payment rate system, the adjustments to employee eligibility relating to the relevant dates of employment (i.e., including both 1 March 2020 and 1 July 2020) and the new modified decline in turnover test.
In addition to satisfying all the other qualifying conditions, the new actual decline in turnover test must be satisfied separately for Extension Period 1 and Extension Period 2.
Importantly, an entity is not excluded from qualifying for the JKP in Extension Period 2 simply because it did not qualify for the JKP in Extension Period 1 (or even where it did not qualify for the original JKP scheme prior to 28 September 2020). In other words, the new additional test for each period is not contingent on a business having qualified for any, or all, of the earlier periods.
Qualifying for the first time under JobKeeper 2.0
A business may not have participated in the original JKP scheme (i.e., between 30 March 2020 and 27 September 2020). However, if the business experiences the requisite decline in actual GST turnover for the September 2020 quarter, it may qualify for JKPs from 28 September 2020 to 3 January 2021 (i.e., Extension Period 1 of JobKeeper 2.0).
Note, as the business has not previously participated in the JKP scheme, it will also need to consider if it satisfied the original projected GST turnover test (as modified) as well as all the other eligibility criteria (e.g., business was being carried on in Australia on 1 March 2020).
For JobKeeper fortnights beginning on or after 4 January 2021 (i.e., Extension Period 2 of JobKeeper 2.0), the business will need to test its actual GST decline in turnover with reference to the December 2020 quarter to determine if it continues to qualify for JKPs.
Requalifying under JobKeeper 2.0
A business that originally qualified for the JKPs prior to 28 September 2020 may not qualify for Extension Period 1 of JobKeeper 2.0 (e.g., because it did not meet the actual decline in turnover test for the September 2020 quarter).
However, if they have the requisite decline in actual GST turnover for the December 2020 quarter (i.e., when compared to the corresponding quarter in 2019) the business may re-qualify for payments under Extension Period 2 of JobKeeper 2.0.
If you believe your business may be affected by this change in GST turnover and are interested in accessing JobKeeper 2.0, please get in contact with our team of expert Accountants at Moore Lewis & Partners.
Give us a call on (07) 4638 5300 and let us give you a helping hand and advise you on the best way forward.
National Tax & Accountants’ Association (NTAA) Ltd COVID-19 UPDATE – Extension of the JobKeeper payment.