JobKeeper 2.0 In Brief
The Jobkeeper changes passed the parliament and becomes law and Treasurer registered the Instrument on 15 September 2020. These changes were originally announced on 21 July 2020 and 7 August 2020.
Many businesses wanting to know more about two Tiers of Jobkeeper payments in Extension 1 and 2. Depending on how many hours an employee works, the Jobkeeper payments rate will be split into a Tier 1 rate, which is the higher rate, or Tier 2 rate, which is the lower rate.
What is included in JobKeeper fortnights Tier 1?
Tier 1 includes fortnightly payments of $1,200 for Extension 1 and $1,000 fortnightly payments for Extension 2. These payments are essentially for employees who worked 80 hours or more in the 4 working weeks before 1st March 2020 or 1st July 2020.
These hours can be accumulated actual working hours. Hours paid for public holidays, and paid leave hours (such as annual leave, sick leave, long service leave, carers leave) are all included.
What is included in JobKeeper fortnights Tier 2?
Employees who worked less than 80 hours in the 4 working weeks before 1st March 2020 or 1st July 2022, fall into Tier 2 category, which includes fortnightly payments of $750 for Extension 1 and $650 for Extension 2.
|Extension 1 (Monday 28 September 2020 to Sunday 3 January 2021)||Extension 2 (Monday 4 January 2021 to Sunday 28 March 2021)|
|Tier 1 Rate- fortnightly payments||$1,200 per fortnight||$1000 per fortnight|
|Tier 2 Rate- fortnightly payments||$750 per fortnight||$650 per fortnight|
Eligible business participants for JobKeeper
Eligible business participants are not employees of the business. They are however actively engaged in the business operation. Their eligibility is based on the active hours they spent in the business during the reference period for eligible business participants. The reference period for this group will be whole 28 days of February 2020. For this group the two payments Tiers also will apply.
Eligible business participants need to submit a declaration to substantiate the active hours worked in the business during the reference period.
What are some of the employers’ obligations?
In order to qualify for Jobkeeper payments, the employers must determine their employees’ tier levels. Employers should have done this via the Streamline STP reporting before the start of the Jobkeeper 2.0, that is 28 September 2020.
In addition, employers must advise their employees in writing of their Tier category. This has to be done within 7 days of the Streamline STP submission.
In relations to reference period to identify the correct Tiers applicable to employees, there are alternative tests, which are also available for eligible business participants.
Changes to turnover test
From the start of the Extension 1 (i.e. Monday 28 September 2020), a new actual decline in turnover test will be applied in addition to the current decline in turnover test. The main difference will be that the goods and services tax (GST) turnover is based on actual and not projected turnover.
The test period from this date is quarter and not month. For Extension 1, the current GST turnover for the Sep 2020 quarter will be compared with the GST turnover for the Sep 2019 quarter, and for Extension 2 the current GST turnover for the Dec 2020 quarter will be compared to current GST turnover for the Dec 2019 quarter.