JobKeeper Extension Kicks in with Reduced Payments, New Eligibility Tests
The Australian Government’s six-month extension of the JobKeeper wage subsidy, dubbed JobKeeper 2.0 or JobKeeper Extension, has kicked in from 28 September 2020 to 28 March 2021.
Eligibility for the JobKeeper Extension is now based on actual turnover in the relevant periods, and the payment has been stepped down from the initial $1,500 per fortnight and paid at two rates.
Here’s how it works
For the first extension period running from 28 September 2020 to 3 January 2021, employees who worked for 80 hours or more in the 28-day period before either 1 March 2020 or 1 July 2020 will receive $1,200 per fortnight. All other employees will receive $750.
For the second period, running from 4 January 2021 to 28 March 2021, the rate will drop to $1,000 per fortnight and $650 per fortnight, respectively.
This is summarised in the following table:
JobKeeper Extension timeframe
Decline in actual turnover - quarter test period
80-hour work test met
80-hour work test not met
|Period 1: 28 September 2020 to 3 January 2021||Based on actual turnover for September 2020 quarter compared to September 2019(or alternative comparable period where available).||$1,200 per fortnight||$750 per fortnight|
|Period 2: 4 January 2021 to 28 March 2021||Based on actual turnover for December 2020 quarter compared to December 2019 (or alternative comparable period where available).||$1,000 per fortnight||$650 per fortnight|
Actual decline in turnover
The JobKeeper Extension now requires an entity to test their decline in turnover based on actual turnover rather than on projected turnover as required under the initial JobKeeper rules.
The new actual turnover test will be based on two key quarterly periods - the September 2020 and December 2020 quarteers, compared to relevant prior period quarters.
To qualify for the first extension period, entities need to satisfy the new actual decline in turnover test for the quarter ending 30 September.
Guided by whether an entity is a registered charity; a business with turnover of $1billion or less, or a business with a turnover of more than $1billion, they will be required to demonstrate a decline of either 15 percent, 30 percent, or 50 percent, relative to the comparable quarter in 2019.
To qualify for the second extension period between 4 January 2021 and 28 March 2021, the actual decline in turnover test will need to be applied for the quarter ending 31 December 2020.
Under the new rules entities can qualify for JobKeeper for each extension period if they satisfy the actual decline in turnover test for that quarter, even if they didn’t previously qualify.
The rules state that JobKeeper Extension “recognises that eligibility for later JobKeeper periods needs to take into account the most recent impacts on the turnover of affected businesses to ensure support is targeted to those businesses still significantly impacted by COVID-19.”
New 80 hour work test
Assuming the actual decline in turnover test has been met, each employee must also be assessed against an 80-hour work test, which then determines the rate of JobKeeper payment for an employee.
In determining whether an eligible employee has met the 80-hour work test, the JobKeeper Extension rules refer to an entity’s pay period over the last consecutive 28 days that end before:
- 1 March 2020
- 1 July 2020.
An employee is required to have worked at least 80 hours in a 28-day period prior to either 1 March 2020 or 1 July 2020 in order for an employer to be entitled to the higher JobKeeper payment rate.
If the 80-hour work requirement is not met, the relevant lower JobKeeper payment rate applies. For employees on a fortnightly payroll, this would comprise the last two consecutive pay periods that ended prior to 1 March 2020 or 1 July 2020.
If the 80-hour work requirement is not met, the relevant lower JobKeeper payment rate applies.
The above information is a condensed overview only, and there is a level of complexity in the JobKeeper Extension rules to be aware of.