I am craving a time when our world is not all about COVID-19, and our work as accountants is not consumed with Jobkeeper changes, but that time seems a long way away. As my inbox continues to be filled with questions about Jobkeeper I think it is time for another update.
We were eagerly awaiting the legislation for Jobkeeper 2.0 to be introduced to parliament last week so that we could gain some clarity, however the legislation that was introduced failed to provide the answers we were seeking. It is clear that the government is going to take a more cautious approach with Jobkeeper 2.0. The Bill that was introduced only provided for an extension of the Jobkeeper scheme until 28 March 2021.
The Bill also provided extensions to Fair Work concessions for Jobkeeper qualified employees while also extending the concessions to “legacy” employers. Legacy employers are those who are currently on Jobkeeper 1.0 but will fail to meet the 30% decline in turnover test required to access Jobkeeper 2.0. They will still be able to a apply the Fair Work concessions if they have demonstrated a 10% or more decline in turnover in the September quarter.
Retesting for Jobkeeper 2.0
As mentioned above we are still waiting on clarification of testing for Jobkeeper 2.0 which is the extension of Jobkeeper beyond 28 September. You do not need to retest for Jobkeeper until then.
Although you need to report your turnover on a monthly basis as part of Jobkeeper 1.0, you are not doing this to pass any tests. It is just reporting. You have qualified for Jobkeeper 1.0 and you continue to be eligible for Jobkeeper 1.0 until the 28 September 2020. Your last payments will be received in October.
To continue after 28 September you will need to retest. If you pass this new test you will get Jobkeeper 2.0 until 3 January 2021. The rates will be reduced for Jobkeeper 2.0 to a two-tiered system of $1200 per fortnight or $750 per fortnight depending on the number of hours worked. An explanation on the “hours worked” test is below.
There will be another retest for the period 4 January 2021 – 28 March 2021 with the payment rates dropping to $1000 per fortnight and $650 per fortnight based on the two-tier system.
What we know is that the retest will be based on your turnover for the September quarter. The indications are that this retest will be comparing your Business Activity sales figures (G1-1A) between quarters. No doubt there will be some alternative tests available but I believe the testing criteria will be more defined for Jobkeeper 2.0. You will be required to retest for the January- March payment based on your December quarter turnover.
The expectation is that many businesses who qualified for Jobkeeper 1.0 will not qualify for Jobkeeper 2.0. 60% of the participants are expected to come from Victorian businesses. Unless you are in a highly impacted industry (such as travel or entertainment), you have probably seen sufficient recovery to not qualify for Jobkeeper 2.0.
My suggestion is to have a look at the BAS you lodged in September 2019. Work out the reduction of 30% that you would need to meet to qualify again. See where you are up to now, and see if there is any likelihood of qualifying for Jobkeeper 2.0. If not, forget about it. It is not designed for any where near as many businesses as Jobkeeper 1.0.
The Two-Tiered Payment Criteria
If you are eligible for Jobkeeper 2.0, the amount of payment will depend on the average hours that were worked in the business over a four week “reference”period. That period will be either the 4 week pay periods prior to 1 March (so February) or 1 July (so June). If the employee qualified from 1 March they take the highest of these four week period averages.
Based on the average calculated the employee will either have worked more than 20 hours, or less than 20 hours, and the payment amount will be based on the tier they fit into.
This is the same for business participants. If you are claiming Jobkeeper 2.0 as a business participant, you will need to determine the hours you were actively engaged in the business in the reference period to work out which level of payment you will receive.
Still more questions
Of course we have many questions that still need to be answered. With Jobkeeper 1.0 we anticipated the issues, anticipated the answers and then were frustrated when the rules were changed over and over again. This time, we wait for clarification.