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:
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:
JobKeeper extension period
20 or more work hours on average per week
Less than 20 work hours on average per week
28 September 2020 to 3 January 2021 (first extension period)
$1,200 per fortnight
$750 per fortnight
4 January 2021 to 28 March 2021 (second extension period)
$1,000 per fortnight
$650 per fortnight
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
The JobKeeper Extension has effectively two testing periods to measure decline in turnover:
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:
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 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
NSW Government 1st Stimulus Package-
The NSW Government announced a major $2.3 billion health boost and economic stimulus package to protect the community and help protect jobs in the face of the COVID-19 outbreak over the next six months. Click Here
NSW Government 2nd Stimulus Package-
The NSW Government released the second stage of its economic package aimed at keeping people in jobs, helping businesses and supporting our most vulnerable in the face of the COVID-19 pandemic. CLICK HERE
NSW Government 3rd Stimulus Package-
Thousands of small businesses across NSW struggling to cope with the COVID-19 shutdown will receive grants of up to $10,000 under a new assistance scheme announced by Premier Gladys Berejiklian, Treasurer Dominic Perrottet and Minister for Finance and Small Business Damien Tudehope. 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:
$80 million to help the vulnerable through a range of measures.
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"