Dear valued clients,

On 21 July 2020, Treasury announced that the JobKeeper Payment (JKP) would be extended until 28 March 2021 (i.e., for a further six months beyond its original finish date of 27 September 2020).

From 28 September 2020, the JKP will be less generous and access to it will be more limited as businesses will be required to reapply the Decline in Turnover Test.

The JobKeeper 2.0 will apply from the fortnight commencing 28 September 2020 and has no impact on the current JKP regime.

Along with the changes to the JKP, the Government also announced that there would be changes to the JobSeeker Payment and that the Coronavirus Supplement would be extended until 31 December 2020, however at a reduced rate.

Following is a summary of what JobKeeper 2.0 will look like, as well as an update on other COVID- 19Measures.

Kind regards,

Prathana Harris (Mai) – CPA

Director

1. JobKeeper 2.0

On 21 July 2020, Treasury released the fact sheet Extension of the JobKeeper Payment (refer below for link) setting out the details of JobKeeper 2.0, as follows:

JobKeeper Payments will now be payable until 28 March 2021

JKPs will now be made beyond 27 September 2020 with two separate extensions, being:

  • Extension period 1 – which covers the seven JobKeeper fortnights that commence on 28 September 2020 and end on 3 January 2021; and
  • Extension period 2 – which covers the JobKeeper fortnights that commence on 4 January 2021 and end on 28 March

Note: Separately new Decline in Turnover Test is required for both Extension Period 1 and Extension Period 2.

JKPs will now be made at two different rates

Where an employer, sole trader or an eligible entity with an eligible business participant (‘EBP’), qualifies for a JKP, they will either be paid at the:

  • Full rate; or
  • Reduced

An employer will be paid at the full rate if, in the four weeks of pay periods before 1 March 2020, the employee was working in the business or not-for-profit for 20 hours or more a week on average.

A sole trader EBP, or an eligible entity with an EBP, will be paid at the full rate if the EBP was actively engaged in the business for 20 hours or more per week on average in the month of February 2020.

Note: where the employer only qualifies for a JKP at the reduced rate, they only need to pay that reduced amount to the employee in order to satisfy the wage condition. The Treasury fact sheet also notes that the JKP will continue to be paid in arrears.

What are the two JobKeeper 2.0 rates?

These rates will be fixed for all of Extension Period 1 but will be adjusted downward for Extension Period 2. Refer to the table below.

What will JobKeeper 2.0 look like?

The following table sets out the full and reduced JKP rates for Extension Periods 1 and 2.

Re-satisfying the Decline in Turnover Test

Under the existing JobKeeper Scheme, an employer, a sole trader EBP or an eligible entity with an EBP was only required to satisfy the Decline in Turnover Test once in order to be entitled to all 13 JKPs from 30 March 2020 to 27 September 2020.

However, under JobKeeper 2.0, an employer, sole trader EBP or eligible entity with an EBP will not only have to satisfy this test a second time to be entitled to the seven JKPs in Extension Period 1, but will have to satisfy it a third time to be entitled to the six JKPs in Extension Period 2.

Extension Period 1

For the purposes of being eligible for JKPs in Extension Period 1:

(a) actual GST Turnover for the June 2020 quarter must be at least 30% less than its GST turnover for the June 2019 quarter; and

(b) actual GST Turnover for the September 2020 quarter must be at least 30% less than its GST turnover for the September 2019 quarter.

Importantly, the turnover calculations above are based on actual GST turnover.

Extension Period 1 Test must be satisfied to be eligible for Extension Period 2 payment.

Extension Period 2

For the purposes of being eligible for JKPs in Extension Period 2:

(a) actual GST Turnover for the June 2020 quarter must be at least 30% less than its GST turnover for the June 2019 quarter;

(b) actual GST Turnover for the September 2020 quarter must be at least 30% less than its GST turnover for the September 2019 quarter; and

(c) actual GST Turnover for the December 2020 quarter must be at least 30% less than its GST turnover for the December 2019 quarter.

1.1 JobKeeper 2.0 and the Fair Work Act

As part of the existing JobKeeper Scheme, a number of amendments were made to the Fair Work Act 2009 (FWA) to allow employers to temporarily vary work arrangements. Currently, these arrangements are due to cease entirely on 28 September 2020.

Whilst Treasury has updated its JobKeeper Payment: Changes to the Fair Work Act fact sheet with a comment about the extension of the JobKeeper Scheme to 28 March 2021, there is, however, no indication that these FWA amendments will apply beyond their existing 28 September 2020 cessation date in order to mirror the extension to JKPs.

For more details

Please refer below for the links to the following Treasury facts sheets:

Extension of the JobKeeper Payment (21 July 2020)

https://treasury.gov.au/sites/default/files/2020-07/Fact_sheet-JobKeeper_Payment_extension_0.pdf

JobKeeper Payment: Changes to the Fair Work Act (21 July 2020)

https://treasury.gov.au/sites/default/files/2020-07/Fact_sheet-Changes_to_Fair_Work_Act.pdf

2. Apprentices and Trainees

Changes announced in the Economic and Fiscal Update

In the Economic and Fiscal Update, the Treasurer announced the following changes to the Apprentices and Trainees wage subsidy:

  • From 1 January 2020 to 30 June 2020, small businesses (with less than 20 employees) could claim the wage subsidy for apprentices or trainees who had been in training with the business as at 1 March 2020.
  • From 1 July 2020 to 31 March 2021, small and medium-sized businesses (with less than 200 employees) can claim the wage subsidy for apprentices or trainees who have been in- training with the business as at 1 July 2020.

The subsidy will continue to be 50% of the apprentice’s or trainee’s wages subject to the $7,000 per quarter cap. Employers of any size, including Group Training Organisations, that re-engage an eligible out-of-trade apprentice or trainee will continue to be eligible for the subsidy.

For more details

Please refer below for the link to the following Treasury fact sheet:

Supporting apprentices and trainees (21 July 2020)

https://treasury.gov.au/sites/default/files/2020-07/fact_sheet-supporting_apprentices_and_trainees_0.pdf

3. JobSeeker Payment

Changes announced to the Coronavirus supplement

The Government recently announced the following changes in relation to the Coronavirus Supplement:

  • The Coronavirus Supplement will continue to be paid to eligible income recipients until 31 December
  • From 25 September 2020, the Coronavirus Supplement will be $250 per fortnight (reduced from $550).
  • From 25 September 2020 to 31 December 2020, recipients of JSP and Youth Allowance (other) will be able to earn up to $300 per fortnight (up from $106 and $143 respectively) without affecting their

For more details

Please refer below for the link to the following Treasury fact sheet:

Extension of additional income support for individuals (21 July 2020)

https://treasury.gov.au/sites/default/files/2020-07/Fact_sheet-Income_Support_for_Individuals_1.pdf

4. Delivering support for business investment

The instant asset write-off (IAWO) $150,000 threshold extended to 31 December 2020

For more details

Please refer below for the link to the following Treasury fact sheet.

Delivering support for business investment (21 July 2020)

https://treasury.gov.au/sites/default/files/2020-07/Fact_Sheet-Delivering_support_for_business_investment_0.pdf

5. Early access to Super

Access extended to 31 December 2020

As part of its Economic and Fiscal Update, the Government announced that individuals will now have until 31 December 2020 (rather than 24 September 2020) to apply for an early release of super.

For more details

Please refer below for the link to the following Treasury fact sheet.

Early access to superannuation (23 July 2020)

https://treasury.gov.au/sites/default/files/2020-07/Fact_sheet-Early_Access_to_Super_0.pdf

6.  Supporting the flow of credit

Government extends SME Guarantee Scheme until 30 June 2021

From 1 October 2020, eligible lenders will be able to offer loans on the same terms as the current Scheme with the following enhancements:

  • The maximum size of the loans will be increased to $1 million per
  • Loans can be up to five years (rather than three years) and whether there will be a six-month repayment holiday will be at the discretion of the
  • Loans can be used for a broader range of business purposes, including to support
  • Loans can be either unsecured or secured (excluding commercial or residential property).

For more details

Please refer below for the link to the following Treasury fact sheet.

Coronavirus SME Guarantee Scheme – supporting the flow of credit (21 July 2020)

https://treasury.gov.au/sites/default/files/2020-07/Fact_sheet-Supporting_the_flow_of_credit_0.pdf

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