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Jobkeeper 2.0 THE LOWDOWN

This update is put together as information is starting to flow from the Australian Taxation Office – as the legislation arrives I will make more detailed comments on this post.  Note the information below assumes you are a profit making business and gross less than $1 billion a year.

So what is new?

  1. Jobkeeper payments in their present form will continue under the same rules we are familiar with until end of September.  The amount, the tests will not change.  You can still apply for Job Keeper under these rules until the end of September 2020.
  2. From the 1st of October there are new tests.  Note you are still needing to meet a 30% drop in income when tested.  We have the following information on these tests:
    • You need to use your actual GST turnover as a basis – so you are not expected to ‘guess’ if you will have a downturn in the future.
    •   To be paid up until the 3rd of January 2021 you need to be able to demonstrate that the September Quarter (July August September 2020) was down by 30% when compared to 2019 equivalent periods.
    • To be paid from the 4th of January 2021 to the 28th March 2021 you need to be able to demonstrate that ALSO the December Quarter (October, November, December 2020)  was down by 30% when compared to 2019 equivalent periods.
    • There is a strong push for  BAS cash based figures to be used as a basis for proving you meet the tests.  If you are registered for GST on an accrual basis however, you will need to apply the test using accrual not cash based figures.  If you are not registered for GST it would be strongly recommended to base your figures on what was banked/received – ie cash based to work out the test.
    • Even if you haven’t applied before but can pass the above test you are able to apply for Job keeper.
  3. The amounts being paid on job keeper are changing over time
    1. From 28th September 2020 to 3rd January 2021 there are now 2 rates:
      • Employees and active business participants working 20 hours or more a week in the business are entitled to $1200 per fortnight.
      • Employees and active business participants working LESS than 20 hours a week in the business are entitled to $750 per fortnight.
    2. From 4th January 2021 to 28th March 2021
      • Employees and active business participants working 20 hours or more a week in the business are entitled to $1000 per fortnight
      • Employees and active business participants working LESS than 20 hours a week in the business are entitled to $650 per fortnight.
  4. If the pay cycle is longer than 28 days then you can pro-rata the hours to work out if the employee was over or under 20 hours a week.
  5. When you are working out the hours for an employee – you need to include the hours worked plus hours paid for holiday and personal leave as well.
  6. If you are being paid as a business participant it would be wise to consider carrying a diary as you also need to prove the number of hours you have worked in a fortnight

    The hours that an eligible business participant spent actively engaged in your business can include, but are not limited to, time spent on the following activities:

    • providing services, or selling goods
    • supervising and managing the performance of employees
    • negotiating contracts with suppliers and customers including providing quotes
    • drawing up business plans and planning or budgeting reports
    • managing the record keeping and accounts, including the use of the documents for analysis
    • making financial, legal and tax decisions, including time spent on obtaining professional advice (for example ensuring the business complies with legal and regulatory obligations)
    • managing commercial risks of the business

    An eligible business participant would not be actively engaged in the business whilst doing personal (non-business) activities, merely because they think about your business during this time.

  7. All in all, a lot of the rules have not changed – for example in working out if you have an employee eligible for the job keeper grant.  What will be important is to ensure that you are ready early with your calculations for the next test, as well as starting a work diary for each business participant so they can be sure to claim the correct amount of job keeper the following month.