The government has announced further changes to the JobKeeper payment scheme, which will see it continue until March 2021.The current system will remain unchanged until 27 September 2020 as planned, providing $1,500 per fortnight for employees and eligible business participants.
However, from 28 September the changes will apply.
There are several amendments that business owners need to be aware of, including different tiers of payment that apply over two separate time frames, as well as changed eligibility tests.
This means that some businesses currently receiving JobKeeper will no longer be eligible after 28 September, and others will continue to be eligible but will receive less subsidy from the government. It also means that some employees will now become eligible for JobKeeper.
Employee and Business Participant Eligibility
The reference period for employee eligibility has been amended to allow more employees to become eligible for the JobKeeper payment.
The number of hours worked per week during the reference period governs the payment tier the worker will qualify for. Businesses can reference the four weeks prior to either 1 March 2020 OR 1 July 2020. The period with the greater hours should be used as the reference period.
Updated employee eligibility details are available at ATO Eligible employees webpage. There are no changes to the eligibility criteria for business participants and sole traders.
New Rates for 28 September 2020 to 3 January 2021
$1,200 per fortnight – this rate applies to eligible employees and business participants who worked 20 hours or more per week in the reference period.
$750 per fortnight – this rate applies to employees and business participants who worked less than 20 hours per week in the reference period.
New Rates for 3 January 2021 to 28 March 2021
$1,000 per fortnight – this rate applies to eligible employees and business participants who worked 20 hours or more per week in the reference period.
$650 per fortnight – this rate applies to employees and business participants who worked less than 20 hours per week in the reference period.
Business Eligibility Changes
To continue to receive JobKeeper payments, businesses will be required to prove an actual reduction in turnover of 30% or more for the September quarter to continue to receive the subsidy from 28 September 2020 to 3 January 2021.
Businesses will then be required to again satisfy a reduction in turnover test for the December quarter to receive the subsidy from 4 January 2021 to 28 March 2021.
Businesses that have not satisfied the reduction in turnover tests in previous months can still enter the system any time upon meeting the eligibility requirements.
Plan Now for the Reduced Rates
Although we have another couple of months before the changes apply, now is the time to start planning for the reduced JobKeeper rates, both for employees and business participants.
It will also be important to finalise accounts for September quickly, to determine whether your business will continue to be eligible for JobKeeper for the following quarter.
Talk to us to help assess your eligibility for remaining in the system beyond September 2020. We can also help you understand how the changes will affect your business operations and costs, and to update cash flow plans and budgets.