JobKeeper 1.0 has come to an end, so what are the next steps for your businesses?
The first tranche of JobKeeper ended on 27 September 2020. If your business is no longer eligible for JobKeeper payments, here is what you must do now:
- Advise your employees and business participant.
For employees receiving JobKeeper from your business, you should advise them in writing that: The business is no longer eligible, JobKeeper 1.0 payments have ceased and their pay will revert to the conditions that apply under their employment agreement. This is particularly important for those who have been receiving top-up payments.
- Ensure payroll adjusts.
Double check your payroll to ensure that top-up JobKeeper payments have been removed from 28 September 2020 onwards.
**IMPORTANT: Make sure you keep all of your records relating to JobKeeper. This includes: calculations and rationale for the decline in turnover test, employee nomination forms, and any other records for at least five years.**
Is my business eligible for JobKeeper 2.0 payments?
Existing JobKeeper participants must pass the extended decline in turnover test to continue to receive payments on behalf of employees from 28 September 2020 onwards.
This extended test looks at your actual GST turnover for the September 2020 quarter and for the December 2020 quarter.
To pass the test, your business will need to show an actual decline in turnover between the September 2020 quarter and the same period in 2019 by 30%. (15% for ACNC registered charities and 50% for large businesses).
My business has not received JobKeeper previously, can we get it now?
If your business passes the eligibility criteria, you can access JobKeeper when you need it for your eligible employees.
For JobKeeper, your business needs to pass the eligibility tests for the period you are seeking to claim JobKeeper payments.
My business fails the test because its turnover is irregular.
If your business has irregular turnover, there is an alternative test that you may be able to apply for.
This test only applies if your GST turnover is irregular, like what often occurs in the construction industry. It does not apply to seasonal variation.
To understand if your turnover is irregular, look at the 12 months before the test period and divide the 12 months into 3 month periods. If the lowest GST turnover for any of these 3-month periods is no more than 50% of the highest of the 3-month periods, then the test can be applied.
Alternatively, you can look at the 12 months before 1 March 2020 instead of the 12 months immediately before the test period.
My business is a new business without a 2019 comparison period. Can it receive JobKeeper payments?
If the new business started trading after 1 March 2020, it will not be eligible for JobKeeper payments.
If your business started trading before 1 March 2020 but after 1 July 2019, there are alternative tests that can determine whether it is eligible for JobKeeper 2.0:
- Comparing the actual GST turnover for the test period with the turnover of the 3 months immediately before 1 March 2020. (for example, comparing the September quarter 2020 with the 3 months prior to 1 March 2020).
- Comparing actual GST turnover for the test period (for example, the September quarter 2020) with the average turnover since the entity commenced (using whole months).
Does my business need to re-enrol?
Your business does not need to re-enrol if it is already receiving JobKeeper payments. Employers continuing to receive JobKeeper payments will need to:
- Advise the ATO of the payment tiers of eligible employees (or your business participant), and
- Advise your eligible employees of the payment tier that is applicable to them.
Make sure you keep records of your calculations for the decline in turnover test, and the JobKeeper payment tiers for employees.
Identifying the JobKeeper 2.0 payment rates
If your business is eligible for JobKeeper 2.0, you must identify all eligible employees and the applicable JobKeeper rate.
From 28 September 2020, the JobKeeper payment rate will reduce and split into a higher and lower rate. The rate is based on number of hours the employee worked in a 28-day period prior to 1 March 2020.
For eligible employees (employed since 1 March 2020), you must choose the reference period that provides the best outcome for the employees. For many employers, this will be the pre COVID-19, 1 March 2020 reference date. When it comes to eligible employees employed after 1 March 2020, use the pay periods prior to 1 July 2020.
If you have any questions about wrapping up JobKeeper 1.0 for your business, accessing JobKeeper 2.0 or are just needing assistance with other Government stimulus, please do not hesitate to get in touch with the team at BIS Cosgrove.