JOBKEEPER 2.0 PAYMENT
In mid-September 2020, the Treasury finally made the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020 (“Amendment Rules (No. 8)”) as a legislative instrument to implement the changes as announced by the Australian federal government on 21 July and 7 August 2020 to the JobKeeper (Wage Subsidy) Payment scheme.
The earlier Amendment Rules (No. 7) dated 14 August 2020 extends the JobKeeper Payment to eligible employees with reference to the 1 July 2020 testing point while the later Amendment rules (No. 8) give effect to the other announced changes.
Under the Amendment Rules (No. 8), the JobKeeper Payment will be extended for 6 months (from 28 September 2020) until 28 March 2021 upon expiry of the original JobKeeper Payment (JobKeeper 1.0) on 27 September 2020. The extended JobKeeper Payment (JobKeeper 2.0) will provide targeted support to those businesses and not-for-profits who continue to be significantly impacted by the Coronavirus (COVID-19) and need financial assistance the most.
The other changes to JobKeeper Payment are:
(ii) From 4 January 2021 to 28 March 2021, an eligible business (including self-employed and not-for-profits) must satisfy:
The original decline in turnover test has now been extended to include the months of October to December 2020, and the December 2020 quarter. This means that if a business experiences the required percentage of (projected) turnover decrease in any 1 month (between March and December 2020) or 1 quarter (between April and December 2020), it would satisfy the original decline in turnover test.
Practically, a business that can satisfy the additional (actual) decline in turnover test in the September and/or December 2020 quarter would also satisfy the original decline in turnover test for the same quarter. In addition, eligible businesses that claimed JobKeeper 1.0 should have already satisfied the original decline in turnover test and will not need to re-apply this test again.
However, it is important to note that the actual decline in turnover test must be met separately for the 2 extended periods above. Therefore, a business which does not qualify for JobKeeper Payment in the first extended period ending 3 January 2021 can become eligible in the second extended period ending 28 March 2021.
The required percentage of decline in turnover for both the original and additional tests is dependent on the employer’s aggregated (annual) turnover. Please refer to JobKeeper 1.0 Payment for further detail.
The need for businesses to reassess their eligibility for JobKeeper Payment over the extension period is to ensure that only those businesses that need the most help will continue to receive the payments.
(i) From 28 September 2020 to 3 January 2021:
(ii) From 4 January 2021 to 28 March 2021:
The need for an eligible employer to count the number of hours worked by an eligible employee should only be relevant for part time or long term casual employees. For fortnightly payroll, the 28-day period comprises the last 2 consecutive pay fortnights, or for weekly payroll, the last 4 consecutive pay weeks, before 1 March 2020 or 1 July 2020. For monthly payroll, an eligible employee’s monthly wages will need to be pro-rated to 28 days. In addition, the actual hours worked includes any hours paid for leave (such as annual, long service, sick, carers and compassion) and for public holidays.
JobKeeper 2.0 will be tapered in the December 2020 and March 2021 quarters to encourage businesses to adjust to the new environment, supporting a gradual transition to economic recovery. The two-tiered rates aim to better align JobKeeper Payment with the usual income of employees (especially those who earned less than the minimum JobKeeper Payment amount before the onset of the COVID-19 pandemic).
In relation to reporting and payment obligations, an eligible employer must:
Generally, businesses will need to assess their eligibility for JobKeeper 2.0 in advance of their business activity statement lodgement deadline in order to comply with the Wage Condition.
In addition, subsequent to the Amendment Rules (No. 8) being enacted, the Commissioner of Taxation has made various legislative instruments to:
(i) The employee’s gross salary/wages (excluding any top up JobKeeper Payment), commission, bonuses, allowances (inclusive of PAYG withholding), fringe benefits and salary scarified superannuation totalled $1,500 in the testing period.
An eligible employer must always consider whether the higher tier 1 rate can apply under an alternative reference period where an eligible employee or business participant only qualifies for the lower tier 2 rate under a standard reference period. Please contact us for further information on these alternative testing periods and/or specific circumstances.
In the meantime, if you have any questions, please do not hesitate to contact one of our partners (Mark, Greg and Justin) or our tax director (Melanie).
JOBKEEPER 1.0 PAYMENT |
As the Australian governments at both federal and state level imposed stricter mitigation measures to slow the spread of the coronavirus (COVID-19) in recent weeks, most businesses particularly those in the tourism, hospitality and retail industries have been hard hit resulting in substantial job losses and retrenched workers across the country. To strengthen the Australian economy’s ability to withstand the significant economic impacts of COVID-19, on 30 March 2020, the Australian federal government announced its third set of stimulus measure, namely the $130 billion JobKeeper (Wage Subsidy) Payment which brings the total stimulus packages announced to date to $320 billion (i.e. 16.4% of annual GDP). The Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 was swiftly passed by both Houses of Parliament and received royal assent on 9 April 2020. The Act establishes a framework for the Treasury to make rules by legislative instrument for JobKeeper Payment to be administered by the Commissioner which would allow flexibility in payment arrangements and necessary changes be made quickly to respond appropriately to the economic impacts of COVID-19. According to the Treasury’s Rules (“Rules”), the key eligibility requirements and administration processes are as follows: |
JobKeeper Payment
This means that for eligible employees who earn below $1,500 per fortnight, they will now receive $1,500 per fortnight (including part of the wage subsidy their employer will receive from the Australian Taxation Office (“ATO”)). Please note that their employer can choose whether to pay superannuation on any additional wage in excess of the employee’s normal wage. For those who earn more than $1,500 per fortnight, they will continue to receive their normal wage but their employer will receive $1,500 from the ATO to subsidise its costs of employment and the pressure of that on its business).
In the meantime, if you have any questions, please do not hesitate to contact one of our partners (Mark, Greg and Justin) or our tax director (Melanie). |
On 22 March 2020, the Australian Federal Government announced a second set of stimulus package in response to the economic effects of the coronavirus (COVID-19) as the outlook has deteriorated since its initial response announced on 12 March 2020. These economic stimulus packages now total $189 billion (i.e. 9.7% of annual GDP).
On 23 March 2020, the various Coronavirus Economic Response Package Bills 2020 passed both Houses of Parliament and received royal assent the next day.
There are 3 target areas:
1. SUPPORTING INDIVIDUALS & HOUSEHOLD |
|
|
|
|
|
2. SUPPORTING BUSINESSES |
|
|
|
|
|
|
3. SUPPORTING THE FLOW OF CREDIT |
|
|
|
|
|
For further information, please refer to the various fact sheets available on the Australian Treasury website at https://treasury.gov.au/coronavirus
If you have any questions, please do not hesitate to contact one of our partners (Mark, Greg and Justin) or our tax director (Melanie).
On 12 March 2020, the federal government announced an Economic Stimulus Package to help the Australian economy withstand and recover from the economic impacts of the coronavirus (COVID-19). It is designed to support business coantinuity, confidence and employment.
These measures are intended to be legislated in late March 2020 and include:
Once the draft legislation to implement the above measures has been released, we will provide you with further information on the fine detail as soon as possible.
In the meantime, if you have any questions, please do not hesitate to contact one of our partners (Mark, Greg and Justin) or our tax director (Melanie).
Level 5, 179 Elizabeth Street
Sydney NSW 2000, Australia
GPO Box 3403 Sydney NSW 2000
Tel +61 2 9221 7022
Fax +61 2 9221 7080
Member of Russell Bedford International - a global network of independent professional services firms.
© Copyright 2020 by Camphin Boston | Privacy Policy | Disclaimer