The government has announced an extension to the JobKeeper scheme for a further 6 months, to 31 March 2021. The extension has been dubbed “JobKeeper 2.0”
It is widely acknowledged and accepted that the initial JobKeeper scheme (which I will refer to as “JobKeeper 1.0”) hereon in, was rushed out to stimulate the economy quickly but as a result, there were some strange anomalies around who did and who didn’t qualify for the payment.
Although JobKeeper 1.0 will remain unchanged until its completion on 27 September, JobKeeper 2.0 will be a bit harder to qualify for.
To be clear, if you legitimately qualified for JobKeeper 1.0, you will continue to receive it through to its completion on 27 September 2020.
JobKeeper 2.0
JobKeeper 2.0 will kick off from 28 September 2020 and continue through to 28 March 2021. This comprises 13 fortnights (6 months). The 13-fortnight period will be further divided into 2 periods called:
- the 1st extension period (being the first 7 fortnights); and
- the 2nd extension period (being the next 6 fortnights).
Requalification – decline in turnover test – JobKeeper 2.0
Qualifying for JobKeeper 2.0 does require that a new decline in turnover test be satisfied. The decline percentages used in JobKeeper 1.0 remain – i.e.
- 30% turnover decline for businesses with group-wide turnover of $1 billion or less
- 50% turnover decline for other businesses; and
- 15% for certain not-for-profits
(**Note that further reference to a 30% turnover decline means that, or the relevant decline percentages for your situation as outlined above).
However, qualification for the JobKeeper 2.0 payments will be based on actual turnover results. This will require businesses to look back at their actual results as opposed to estimating their expected turnover. As no predictions will be required, a lot of uncertainty about who does and who doesn’t qualify will be eliminated.
1st EXTENSION PERIOD: 28 September 2020 to 3 January 2021 (the first 7 fortnights)
To qualify for the 1st extension of JobKeeper 2.0, a business must make the following comparisons:
To qualify for the 1st extension of JobKeeper 2.0, a business must make the following comparisons:
To pass the test, there must be a decline in turnover of at least 30% ** in both quarters. The turnover figures can generally be taken from your Business Activity Statements (BAS).
The period then has two fortnightly payments rates – A “full rate” of $1,200 and a “partial rate” of $750. Eligibility for these rates for employees or ‘Business Participants’ is as follows:
To pass the test, there must be a decline in turnover of at least 30% ** for ALL THREE quarters.
Secondly, the “full” and “partial” payment rates fall to $1,000 and $650 respectively.
Early Access to Superannuation Extended
Individuals who are still financially impacted by the COVID-19 pandemic will have more time to apply for the early release of up to $10,000 of superannuation, with the application period extended from 24 September 2020 to 31 December 2020, the Treasury has announced.
APRA revealed recently that over 800,000 Australians have now dipped into their retirement savings for the second time this year.
Government Loan Guarantee Scheme
The government is also extending the COVID-19 SME Guarantee Scheme to loans written until 30 June 2021, and making targeted amendments to ensure that the loans available suit the evolving needs of SMEs.
Return to Work SA (RTWSA) and JobKeeper
We have confirmed with RTWSA that 2019/20 levy calculations should not be adjusted for any JobKeeper received by employers. To be clear, you should pay RTWSA Levy on JobKeeper amounts paid to employees in the 2019/20 year. Note however that the RTWSA Board made the decision that JobKeeper should be excluded for calculation of the 2020/21 levy – i.e. you do not pay levy on JobKeeper amounts paid to employees in the 2020/21 financial year.
You should be aware that there are 2 methods of calculating your RTWSA Levy for the coming (2020/21) year – an Estimated Remuneration Method and a Fixed Levy method.
Estimated Method – If you use this method, you usually estimate your remuneration for the coming year, then your monthly levy amounts are based on that estimate. When you get to the end of the year, you calculate your actual remuneration and reconcile it against your original estimate. If there is a difference either way, you will have a shortfall RTWSA Levy payment, or receive a refund. What is different when estimating remuneration for the 2020/21 year is that you should reduce your remuneration estimate by the amount of JobKeeper wages you expect to receive. That is because, as mentioned above, RTWSA Levy will not be payable on JobKeeper wages in that 2020/21 year.
Fixed Levy Method – If on the fixed levy method, we have had confirmed that because the 2020/21 RTWSA levy should exclude the JobKeeper amounts paid, when you report the actual 2019/20 remuneration, you need to remove the expected job keeper from the actual amount of 2019/20 remuneration reported to ensure that the premiums of the 2020/21 year are reduced. In other words, when you report your actual 2019/20 remuneration to RTWSA, you should exclude the JobKeeper amounts you estimate you will receive in the 2020/21 year. Under the fixed option there is no end of year adjustment so what you report as actual for 2019/20 has no impact on premiums assessed for that 2019/20 year but will determine the fixed amount going forward. Yes, it is confusing.
It is our view that in most cases, clients should continue to use the Estimated Method so at year end, there is always a reconciliation & levy adjustment. There would appear to be too much risk in the Fixed Levy Method this year given the uncertainty around matters affected by COVID-19. It is also difficult to estimate how much JobKeeper you might receive without a crystal ball. Unfortunately we are all sold out of crystal balls… Only in the situation where you think wages will dramatically increase in the 2020/21 year (vs the 2019/20 year) should you consider the fixed option as that may result in lower premiums payable without a ‘catch up’ amount.
Yours faithfully,
The team at
Brett Wiseman – Director
brett@interacctbc.com.au Ph: 0402 281 888
James Rogalski – Director
james@interacctbc.com.au Ph: 0428 858 818
Carly Thornton – Director
carly@interacctbc.com.au Ph: 0438 007 054
Cherie Parker – Accountant
cherie@interacctbc.com.au Ph: 08 8683 3077
Tracey Barnes – Accountant
tracey@interacctbc.com.au Ph: 0429 906 661
Monique Catanzariti – Accountant
monique@interacctbc.com.au Ph: 0400 041 589
Jane Aird & Sharon Tiller – Office admin
info@interacctbc.com.au Ph: 08 8683 3077
