Prime Minister Scott Morrison revealed the single largest economic rescue package in Australia’s history on 30 March 2020. The $130b “JobKeeper” wage subsidy is a flat $1,500 fortnightly payment to all businesses significantly affected by coronavirus to retain their employees and provide a cushion for the economy.
Under the original scheme (JobKeeper 1.0), the payments will be made monthly in arrears from 1 May 2020 to cover fortnightly periods commencing 30 March 2020 and ending on 27 September 2020.
On 21 July 2020, the JobKeeper scheme (2.0) was extended from 28 September to 28 March 2021, with changes to eligibility, including an extended decline in turnover test, an extension to cover employees employed on 1 July 2020 and introduction of two tiers of subsidy based on a 20 hours per week worked by employees in either February 2020 or June 2020. Further modifications were announced on 7 August 2020.
The JobKeeper subsidy will be administered by the ATO on a self-assessment basis. Businesses can register their interest online now.
You can find a detailed JobKeeper guide for employers reporting through Single Touch Payroll here.
While we are working with clients to work through a number of the critical steps in this process, you should be aware of a number of enrolment steps that must be taken for your business to qualify for the JobKeeper payments.
Under JobKeeper 1.0 employees must have been in your employment on 1 March 2020, and must continue to be employed while you are claiming the JobKeeper subsidy. This extends to employees who have been stood down or re-hired. As announced on 7 August, JobKeeper will now be extended to employees that were employed as of 1 July 2020. Other eligibility criteria include:
Self-employed individuals operating through partnerships, trusts or companies may also be eligible to receive JobKeeper subsidy.
Salaries and wages should continue to be made using your payroll system and reported to the ATO via Single Touch Payroll. This will support the online claim process when it is available. If you do not report through Single Touch Payroll, you can still claim the JobKeeper subsidy through a manual claim process.
The first phase of JobKeeper was designed to get money out to businesses as quickly as possible. An unintended consequence of this was some employees being paid more on JobKeeper than they had been before COVID. Companies were also able to access JobKeeper if they satisfied the turnover test at any point during COVID, however going forward, there will be much greater scrutiny on changes in revenue.
20+ hours a week
<20 hours a week
Until 27 September 2020
|$1,500 a fortnight||$1,500 a fortnight|
From 28 September 2020
|$1,200 a fortnight||$750 a fortnight|
From 4 January 2021
|$1,000 a fortnight||$650 a fortnight|
The JobKeeper payment will remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.
On 23 April 2020, the ATO released alternative “turnover decline” tests to assist employers to satisfy the decline in turnover test for JobKeeper 1.0 purposes where they cannot satisfy the existing primary test by comparison to 2019 turnover.
These alternative tests are expected to be modified to accommodate the changes to the decline in turnover test in JobKeeper 2.0.
The alternative tests for JobKeeper 1.0 cover a number of specific classes of “unusual” circumstances including:
If one of these classes of circumstances apply, an employer can select the corresponding alternative test(s). Examples of the alternative tests include testing over the most recent 3 months, comparing with a pre-2019 year or using monthly or quarterly averages over the past year.
The above alternative tests do not cover other common circumstances where employers were looking for specific ATO guidance, for example, start-up/exploration employers with no turnover, employers with specific badly impacted divisions or employers who only provide input-taxed supplies. It is unclear if the ATO will introduce further alternative tests to assist employers under these circumstances.
You can read more on the ATO website here.
Government entities and entities subject to the Major Bank Levy will not be eligible for the package.
The turnover decline will require that turnover of a current period be compared with a comparable period of a year earlier (of at least one-month duration).
The GST turnover test for the purposes of the JobKeeper subsidy is a modified version of the GST turnover test included in the GST law.
The GST turnover test in the GST law is modified for the purposes of the JobKeeper subsidy to:
Further, whilst the current and projected GST turnover tests for GST purposes essentially refer to a twelve (12) month period, this too is modified for the purposes of the JobKeeper subsidy (refer to the comments below with respect to the ‘turnover test period’).
A business satisfies the decline in the turnover test if, at the time of testing, the entity’s projected GST turnover for a turnover test period falls short of the entity’s current GST turnover for a relevant comparison period.
This shortfall then needs to be expressed as a percentage of the comparison turnover and compared against the turnover decline percentage applicable to the business (i.e. 30%, 50% or 15% turnover decline).
The turnover test period must be under JobKeeper 1.0:
This was extended in JobKeeper 2.0 to include the September 2020 quarter for eligibility until 3 January 2021 and the December 2020 quarter for eligibility until 28 March 2021.
The relevant comparison period must be the period in 2019 that corresponds to the turnover test period.
Impacted Retailer Pty Ltd (“Impacted Retailer”) is a subsidiary of Retailer Group Limited (“Retailer Group”). Retailer Group also has another subsidiary, Online Retailer Pty Ltd (“Online Retailer”).
Impacted Retailer has a GST turnover of less than $1b. Further, the combined GST turnover of Impacted Retailer, Retailer Group and Online Retailer does not exceed $1b.
Impacted Retailer assesses its eligibility for JobKeeper subsidy in respect of its employees on 8 April 2020 based on an actual GST for the September 2020 quarter of $10m.
The comparable period is the September 2019 quarter, for which Impacted Retailer had an actual GST turnover of $15m.
Impacted Retailer’s September 2020 quarter acual GST turnover falls short of the September 2019 quarter turnover by $5m, which is 33.33% of the September 2019 quarter actual GST turnover. This 33.33% shortfall percentage exceeds the specified percentage turnover decline percentage of 30% that applies to Impacted Retailer. Therefore, the decline in the turnover test is satisfied by Impacted Retailer and it is eligible for the JobKeeper subsidy from 28 September 2020 to 4 January 2021.
Impacted Retailer does not need to account for turnover in other group companies in determining whether it is eligible.
Payments subsidised by JobKeeper exempt from Payroll Tax?
|NSW||Only additional payments that an employer makes to bridge the gap between their employee’s normal wage and the $1500 a fortnight required to qualify for JobKeeper payments.|
|VIC||Only additional payments that an employer makes to bridge the gap between their employee’s normal wage and the $1500 a fortnight required to qualify for JobKeeper payments.|