Stimulus Packages - Jobkeeper 2.0 update

JOBKEEPER EXTENSION ANNOUNCEMENT

On Tuesday 21 July 2020, the Australian Federal Government released new rules on the JobKeeper wage subsidy scheme to effectively extend the scheme for a further six months until 28 March 2021. With new testing requirements and reduced cash payments, the government has dubbed this ‘JobKeeper Version 2’ or the ‘JobKeeper Extension’.

The main changes are:

1. The existing JobKeeper rules will continue to apply as originally introduced until 27 September 2020;
2. The new JobKeeper Extension will apply for an additional 6 months from 28 September 2020 until 28 March 2021;
3. The current $1,500 per fortnight JobKeeper subsidy is to be reduced with effect from 28 September 2020 under a two tiered approach and also based on average working hours as at 1 March 2020 (see below for further details);
4. Under the JobKeeper Extension, the decline in turnover tests will now be based on actual rather than projected turnover (see below for further details);
5. The existing JobKeeper and JobKeeper Extension will continue to be available to new participants in the scheme provided they meet the relevant tests. This includes carrying on a business and having eligible employees as at 1 March 2020.

Payments of $1,500 per fortnight to be reduced

the work hours test

Under the JobKeeper Extension, the current $1,500 JobKeeper payment will be reduced under a two tiered approach, and the level of payment will depend on whether the employee or business participant worked at least 20 hours per week (work hours test) prior to 1 March 2020. This can be summarised in the following table:

In regard to the table above, the work hours test differs slightly depending on whether the worker is an employee or business participant.

For employees, the work hours test is based on an average of working hours during the four weeks of pay periods before 1 March 2020.

For eligible business participants, the work hours test is based on their average work hours during the month of February 2020 and who were actively involved in the business.

The Commissioner will also have discretion to allow the work hours test to be met where it might have otherwise been failed in certain circumstances (e.g. employee was on leave; not employed during all or part of February 2020 or volunteering during bushfires).

Employees still need to be ‘eligible employees’ to come within the scheme.  This includes the current test for long-term casuals.

New turnover test requirements

and application of new rules

The JobKeeper Extension has effectively two testing periods to measure decline in turnover:

• 28 September 2020 to 3 January 2021 (first testing period)
• 4 January 2021 to 28 March 2021 (second testing period)

Under the first testing period, businesses must satisfy the decline in turnover test based on actual turnover during the quarters ending June 2020 and September 2020.  This is compared to the same period in 2019.

Under the second testing period, businesses must satisfy the decline in turnover test based on actual turnover for the quarters ending June 2020, September 2020 and December 2020.  This is compared to the same period in 2019.

The ATO can specify alternative tests.

Application of new rules

The two steps and timelines that businesses should take note of can be summarised as follows:

1. Test employees – Businesses will now need to effectively segregate permanent employees from casuals and apply the 20 hour work test as at 1 March 2020 for the purposes JobKeeper payment rates.
2. Turnover test – As the decline in turnover test will now be based on actual rather than projected turnover, it will be important for businesses to ensure their record keeping systems are accurate and up to date for the purposes of applying the decline in turnover tests.

Rules for JobKeeper Extension

The penalties for failure to comply with the rules can constitute an offence under the Commonwealth Criminal Code including up to 10 years gaol, see the fact sheet ‘Protecting Integrity’.

Seek professional advice if you need assistance.

JobKeeper Extension https://treasury.gov.au/coronavirus/jobkeeper/extension

JobKeeper Fact Sheets https://treasury.gov.au/coronavirus/jobkeeper

Federal Government

Packages

Federal Government 1st Stimulus Package-

The Morrison Government has announced a $17.6 billion economic plan to keep Australians in jobs, keep businesses in business and support households and the Australian economy as the world deals with the significant challenges posed by the spread of the corona-virus. Click Here

Federal Government 2nd Stimulus Package-

The Government’s 2nd economic response will support business through the period ahead. It is designed to support businesses in managing short-term cash flow challenges, provide support to individuals, severely affected communities and regions, and to ensure the continued flow of credit in the Australian economy. The second set of economic responses which, combined with our previous actions, total $189 billion across the forward estimates, representing 9.7 per cent of annual GDP. CLICK HERE

Federal Government 3rd Stimulus Package-

The Morrison Government will provide a historic wage subsidy to around 6 million workers who will receive a flat payment of $1,500 per fortnight through their employer, before tax.

To see the latest on the Federal Government's "Job Keeper"package- CLICK HERE

The payment will be open to eligible businesses that receive a significant financial hit caused by the coronavirus. CLICK HERE

State Government Overview

This latest move follows two assistance packages from NSW in the past fortnight, whose combined value far exceeds the support offered by any other state, including:

• More than $5 billion in payroll tax waivers, deferrals and other tax deferrals;
• A $1 billion Working for NSW fund to create jobs; 
• $700 million in additional funding for the health system; 
• $250 million to bring forward capital works and maintenance on public assets;
• $500 million to bring forward capital works, maintenance and shovel ready infrastructure projects;
• $80 million to waive a range of fees and charges;

$80 million to help the vulnerable through a range of measures.

Local Government

While there are a range of NSW and Australian Government measures which local businesses can access to enable them to continue providing important services to our communities, Council is also establishing an assistance package to assist the Tamworth region to stay in business.

Tamworth Regional Council has approved their proposal for COVID-19 Relief package- For more information CLICK HERE and select "Business Paper 6 April 2020.pdf"