The Government announced on 21 July 2020 that the JobKeeper Payment (JKP) would be extended until 28 March 2021 (i.e., for a further six months beyond its original finish date of 27 September 2020).
From 28 September 2020, the JKP will be less generous and access to it will be more limited as businesses will be required to reapply the Decline in Turnover Test.
Under the current law, the Government only has the power to extend JKPs until 31 December 2020. This means the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 will need to be amended. As Parliament does not resume until 24 August 2020, it is not expected that a Bill will be introduced before this time. Fortunately, JobKeeper 2.0 will not apply until the fortnight commencing 28 September 2020 and has no impact on the current JKP regime.
Rather than winding up the stimulus in September, it will now continue to be available to eligible businesses through to 28 March 2021, however it will be at a reduced payment rate.
Eligibility:
From 28 September 2020:
Business and not-for-profits seeking to claim the JobKeeper Payment will be required to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover).
They will be required to reassess their eligibility with reference to their actual GST turnover in the September quarter 2020. They will need to demonstrate that they have met the relevant decline in turnover test in September quarter to be eligible from 28 September to 3 January 2021.
From 4 January 2021:
Business and not-for-profits will need to further reassess their turnover for eligibility. They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in December quarter 2020 to remain eligible from 4 January 2021 to 28 March 2021.
Payment Amounts:
The current rate of $1500 per fortnight will be reduced down to $1,200 from 28 September and further reduced to $1,000 per fortnight from 4 January 2021.
Casuals working less than 20 hours per week during the month of February 2020 will be paid at lower rate as well (ie $750 per fortnight and $650 per fortnight respectively).
JobKeeper remains open to new recipients, provided they meet the existing requirements and the additional turnover tests during the extension period.
Whilst we hope a large portion of our client operating a business are in a position where they no longer need Jobkeeper payment, for those who are still on the road to recovery, the announcement that the government will be extending jobkeeper, will be a sigh of relief.
We are yet to receive all the details on exactly how eligibility will be tested/reported (especially for alternative tests).
As soon as we have more information, you can count on the team at Elite Accounting Solutions to publish and share it with you.
How can Elite Accounting Solutions Help?
Now more than ever, the team at Elite Accounting Solutions are positioning ourselves to help business owners prepare for what is ahead of them. If you have any concerns about the income and tax implications of any recent changes, please do not hesitate to contact our office and speak with one of our Accountants.
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