The following changes will apply to JobKeeper fortnights commencing 28 September 2020.
Actual decline in turnover test:
For JobKeeper fortnights from 28 September 2020 you will need to meet an actual decline in turnover test. An actual decline in turnover test will need to be met for each extension period:
- Extension 1: from 28 September 2020 to 3 January 2021
- Extension 2: from 4 January 2021 to 28 March 2021
The actual decline in turnover test is similar to the original decline in turnover test. However:
- It must be done for specific quarters only. For Extension 1 – September 2020 quarter must be compared to the September 2019 quarter. For Extension 2 – December 2020 quarter must be compared to the December 2019 quarter.
- You must use actual sales made in the relevant quarter, not projected sales, when working out your turnover
- You must allocate sales to the relevant quarter in the same way you would report those sales to a particular business activity statement if you were registered for GST.
If you are not eligible for JobKeeper under Extension 1 because you do not satisfy the turnover test, you may still be eligible for JobKeeper under Extension 2 if you satisfy the later turnover test. If the “basic” actual turnover test is not appropriate to your circumstances, an alternative turnover test may be available. Details of the alternative tests are yet to be released by the ATO or Treasury.
Rates of payment
For an employee or eligible business participant to receive the Tier 1 (higher) rate of JobKeeper payments in each extension period they will need to satisfy the 80-hour threshold:
The Tier 1 rate will apply to:
- Eligible employees who worked for 80 hours or more in the four weeks prior to the last day of the pay period that ended before either 1 March 2020 or 1 July 2020, and
- Eligible business participants who were actively engaged in the business for 80 hours or more in February 2020 and provide a declaration to that effect.
In some circumstances, alternative reference periods may apply for determining the 80 hour threshold (e.g. where the employee was on unpaid emergency leave during the relevant 4 week period).
- Businesses will have to wait until the end of September when they complete their BAS before applying the decline in turnover test for the Extension period 1 (as the test is now based on actual GST turnover).
- For the JobKeeper fortnights stating 28 September and 12 October 2020, the ATO is allowing employers until 31 October to meet the wage condition for employees.
- Monthly business declarations for October (the first two fortnights of the extension) will need to be made by 14 November 2020. If you were eligible for JobKeeper 1.0 you need to tell the ATO whether the Tier 1 (higher) or Tier 2 (lower) payment rate applies to your eligible employees or business participants in the monthly declaration form.
For further information please see the ATO website or contact us at PrincipleFocus.