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Government extends lifeline to small business with extension to JobKeeper assistance package

Roelof van der Merwe
22/07/2020

With the current JobKeeper assistance package of $1,500 a fortnight due to end on 27 September 2020, the Government announced on 21 July 2020 the JobKeeper assistance package will be extended in a scaled-back version for another six months.

While good news for small businesses, the revised JobKeeper scheme will come with tougher turnover conditions to satisfy and a significant reduction in JobKeeper payments for employees who worked less than 20 hours a week as measured in the four weeks prior to 1 March 2020.

This reduction in JobKeeper payments will most likely affect long-term casual employees as well as part time employees who generally worked less than 20 hours a week.

JobKeeper 2.0

The new JobKeeper package will differ from the original JobKeeper assistance package with changes to the frequency of testing the significant fall in turnover and the amount of JobKeeper payments received. It will be broken down into two extension periods:
  1.   28 September 2020 to 3 January 2021.
  2.   4 January 2021 to 28 March 2021.

Significant fall in turnover will be 50% for businesses with an aggregated turnover of more than $1 billion, 30% for businesses with a turnover of $1 billion or less and 15% for Australian charities and not for profit commission-registered charities (excluding schools and universities).

To qualify for JobKeeper payments from 28 September 2020, an organisation must meet the existing eligibility requirements as well as the additional turnover tests. Outlined below are the additional turnover tests and the different payment rates for JobKeeper 2.0 in the extension period:

First JobKeeper extension period: 28 September 2020 to 3 January 2021

To qualify for JobKeeper during the first extension period, an organisation must have a significant decline in turnover in both the June 2020 quarter (i.e. April, May, June) and September 2020 quarter (i.e. July, August, September) relative to comparative periods (e.g. the same quarters in 2019).

The different JobKeeper payment rates for this period will be:

  • $1,200 per fortnight for employees and business participants who worked 20 hours or more per week (as measured in the four weeks prior to 1 March 2020).
  • $750 per fortnight for employees and business participants who worked less than 20 hours per week (as measured in the four weeks prior to 1 March 2020).

Second JobKeeper extension period: 4 January 2021 to 28 March 2021

To qualify for JobKeeper during the second extension period, an organisation must have significant decline in turnover in the last three quarters of 2020 (i.e. June, September and December quarters).

The different JobKeeper payment rates for this period will be:

  • $1,000 per fortnight for employees and business participants who worked 20 hours or more per week (as measured in the four weeks prior to 1 March 2020).
  • $650 per fortnight for employees and business participants who worked less than 20 hours per week (as measured in the four weeks prior to 1 March 2020).

Where an employee or business participant’s hours were not usual during February 2020 (e.g. employees that were on leave or were not employed during the whole of February 2020 so could not meet the 20 or more hours a week test), the Commissioner has a discretion to set out alternative tests.

While the JobKeeper assistance packages will be welcome news for many businesses, we expect to see significant audit activity from the ATO in the coming months to determine whether businesses that have claimed the JobKeeper payment were in fact eligible to qualify.

With the ATO’s wide-spread use of data matching, the ATO has the ability to easily identify any discrepancy between information from different sources (e.g. information from single touch payroll, income tax returns, superannuation fund information and other data from third party sources such as Services Australia) and thereby identify certain JobKeeper “red flags” that may trigger further ATO scrutiny.

If you have any queries about your business’ eligibility for JobKeeper or would like some assistance accessing government support, please talk to your Findex adviser or contact the Tax Advisory team.