JobKeeper 2.0 V4 – Detailed Guide

JobKeeper 2.0 V4 – Detailed Guide

JobKeeper 2.0 V4

 

JobKeeper from 28 September 2020

 

The first tranche of JobKeeper ended on 27 September 2020. Those needing further support will need to reassess their eligibility and prove an actual decline in turnover.

To receive JobKeeper from 28 September 2020, eligible employers need to assess their decline in turnover with reference to actual GST turnover for the September 2020 quarter (for JobKeeper payments between 28 September to 3 January 2021), and again for the December 2020 quarter (for payments between 4 January 2021 to 28 March 2021).

From 28 September 2020, the JobKeeper payment rate will reduce and split into a higher and lower rate based on the number of hours the employee worked in a specific 28 day period prior to 1 March 2020 or 1 July 2020.

To access JobKeeper payments from 28 September 2020, there are three questions that need to be assessed:

  1. Is my business eligible?
  2. Am I and/or my employees eligible? and
  3. What JobKeeper rate applies?

We’ve summarised the key details in this update.

Let us know if we can assist you in any way.

 

Call us on +61 3 5366 0700

Email – Info@Devennypayne.com.au

Follow us on Facebook – Devenny Payne – Facebook Page

 

From 28 September 2020, the eligibility tests to access JobKeeper for employers changed, along with the amount of the JobKeeper payment for employees and business participants. To receive JobKeeper from 4 January 2021, employers will need to assess their eligibility again.

Eligibility for one JobKeeper period does not entitle you to, or exclude you from, payments in another period. Each eligibility period is addressed separately. That is, there might be businesses that qualified for the first tranche of JobKeeper, don’t qualify for the second tranche but qualify for the third.

 

1. Eligible businesses

 

Eligible employers

An eligible employer is an employer that:

  • On 1 March 2020, carried on a business in Australia or was a non‑profit body pursuing its objectives principally in Australia; and
  • before the end of the JobKeeper fortnight, it met the original decline in turnover test*:
15% or more 50% or more 30% or more
ACNC-registered charity (excluding universities, or schools within the meaning of the GST Act – these entities need to meet the basic turnover test) Large businesses where aggregated turnover for the test period is:

·         likely to be $1 billion or more; or

·         aggregated turnover for the previous year to the test period was $1 billion or more

A small business that forms part of a group that is a large business must have a >50% decline in turnover to satisfy the test.

All other qualifying entities
  • And, was not:
    • on 1 March 2020, subject to Major Bank Levy for any quarter ending before this date, a member of a consolidated group and another member of the group had been subject to the levy; or
    • a government body of a particular kind, or a wholly-owned entity of such a body; or
    • at any time in the fortnight, a provisional liquidator or liquidator has been appointed to the business or a trustee in bankruptcy had been appointed to the individual’s property.

1 March 2020 is an absolute date. An employer that had ceased trading before 1 March, commenced after 1 March 2020, or was not pursuing its objectives in Australia at that date, is not eligible.

*Additional tests apply from 28 September 2020.

Business owners

Business owners:

  • sole traders with an ABN, and
  • one partner in a partnership, adult beneficiary of a trust, director or shareholder who works in the business (i.e., only one person in a partnership, one beneficiary of a trust, or one director / shareholder are eligible for JobKeeper payments).

will be eligible for the JobKeeper payment if the following conditions are met:

  • The entity carried on a business on 1 March 2020 and is not a not-for-profit entity; and
  • Had an ABN on 12 March 2020; and
  • Had some business income in the 2018-19 income year included in a tax return that was lodged by 12 March 2020; or made some supplies connected with Australia in a tax period that started on or after 1 July 2018 and ended before 12 March 2020 and notified the ATO of this (e.g. on an activity statement lodged with the ATO) by 12 March 2020. The Commissioner can potentially extend the deadline for holding an ABN, lodging the 2019 tax return or lodging a relevant activity statement.
  • Passed the decline in turnover test; and
  • The individual was not:
    • employed by the business at any time in the relevant fortnight; or
    • a permanent employee of another entity at the time the individual gives the nomination notice (i.e., they do not hold a full time or part time role with another employer); or
    • a nominated JobKeeper employee of any other business; or
    • entitled to parental leave pay or dad and partner pay or workers’ compensation payments for being totally incapacitated for work.
  • As at 1 March 2020, the individual satisfied all of the following:
    • Aged 16 years or over; and
    • If they are aged 16 or 17 years, they are either financially independent or are not undertaking full-time study;
    • Actively engaged in the business; and
    • An Australian resident under the Social Security Act or an Australian tax resident who holds a special category visa **

If the criteria have been met, the individual is eligible if they were actively engaged in the business in the fortnight of the JobKeeper payment, and they agreed to be nominated for JobKeeper payments and confirmed they pass the eligibility criteria.

 

What about the directors who work in the business?

If more than one director wants to access JobKeeper payments, they need to meet the eligibility criteria of an employee (see Eligible employees). To be an employee a director would have received salary/wages and this has been reported as salary/wages on activity statements, payment summaries, tax returns etc. If a director merely receives a distribution from the business then they are unlikely to be an employee.

 

The decline in turnover test

For businesses already enrolled in JobKeeper, to receive payments from 28 September 2020, you need to meet an extended decline in turnover test based on actual GST turnover.

Businesses that are enrolling for the first time, need to meet the basic eligibility test and the decline in turnover test/s for the relevant period.

  30 March to 27 September 2020 28 September to 3 January 2021 4 January 2021 to 28 March 2021
Decline in turnover test Projected GST turnover for a relevant month or quarter is expected to fall by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.* Actual GST turnover in the September 2020 quarter (July, August & September) fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.*

 

Actual GST turnover in the December 2020 quarter (October, November & December) fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.*

* Alternative tests may apply

Most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility. However, as the BAS deadlines are generally not until the month after the end of the quarter, eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees.

The ATO has the power to extend the time an entity has to pay employees in order to meet the wage condition. For the JobKeeper fortnights starting 28 September 2020 and 12 October 2020 the ATO is allowing employers until 31 October 2020 to meet the wage condition for all employees included in the JobKeeper scheme.

 

Calculating GST turnover

Calculating GST turnover for tranches 2 and 3 of JobKeeper is different to the original JobKeeper requirements as entities will only be using current GST turnover figures (not projected GST turnover).

When applying the new turnover reduction tests for the September 2020 quarter and December 2020 quarter, entities that are registered for GST must use the same method that is used for GST reporting purposes. That is, if the entity is registered for GST on a cash basis then a cash basis needs to be used to calculate current GST turnover for the purpose of these new tests. Entities that are not registered for GST can choose whether to calculate GST turnover using a cash or accruals basis, but must use a consistent method.

Current GST turnover includes proceeds from the sale of capital assets, unless the sale is input taxed. Current GST turnover includes taxable and GST-free supplies, but should exclude input taxed supplies such as residential rental income and financial supplies like dividends, interest etc. JobKeeper and ATO cash flow boost payments should be excluded from the calculation along with other payments that don’t represent consideration for a supply made by the entity such as certain State based grants.

 

What if you don’t have a comparison period or there was a one-off event?

Alternative decline in turnover tests might be available if your business fails the original decline in turnover test or the extended Jobkeeper decline in turnover test for the fortnights starting on or after 28 September 2020.

Irregular turnover

The irregular turnover test is for businesses that cannot pass the decline in turnover tests because their GST turnover is irregular or ‘lumpy’, for example what often occurs in the building and construction industry, but not because of seasonal variations.

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 as long as the entity turnover is not cyclical. Alternatively, you can look at the 12 months before 1 March 2020 instead of the 12 months immediately before the test period.

If your GST turnover is irregular you can compare your current GST turnover for the test period with the average current GST turnover for the 12 months immediately before the applicable test period or 1 March 2020, multiplied by 3.

Example irregular turnover

Red Co received JobKeeper previously and needs to pass the extended decline in turnover test if it is to receive JobKeeper from 28 September 2020 for its employees.

Red Co’s current GST turnover for the quarter ending 30 September 2020 (July, August and September 2020) is $89,000.

Red Co cannot pass the basic version of the decline in turnover test for the quarter ending 30 September 2020. Using the 1 March 2020 test date, Red Co works out if its turnover is irregular and it is able to apply the alternative test for irregular income.

To do this, Red Co takes the highest GST turnover for the 3 months pre 1 March 2020 ($200,000) and its lowest ($75,000). $75,000 is 38% of $200,000, which is no more than 50% of the highest turnover for a qualifying 3 month period. As a result, Red Co can apply the alternative irregular income test.

 

 

3 month periods pre 1 March 2020 GST turnover
March, April, May 2019  $   75,000
June, July, August 2019  $ 100,000
September, October, November 2019  $ 150,000
December 2019, January, February 2020  $ 200,000
Total current GST turnover  $ 525,000
Average monthly GST turnover ($525,000/12)  $   43,750
Average monthly GST turnover multiplied by 3  $ 131,250

Red Co finds the average monthly GST turnover for each of the whole months in the 12 month period pre 1 March 2020 by dividing the total GST turnover by 12 (($525,000/12 = $43,750). This average monthly GST turnover is then multiplied by 3 to find the GST turnover comparison period figure ($43,750 x 3 = $131,250).

Red Co’s decline in turnover is 32.2% (($131,250-$89,000)/$131,250=32.2%). Red Co passes the alternative irregular income decline in turnover test.

Adapted from Explanatory Statement Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020

 

New business starting before 1 March 2020

There are two alternative tests that may apply to businesses that were in operation on or before 1 March 2020 but do not have the trading history for the comparison period:

  • Comparing actual GST turnover for the test period (for example, September quarter 2020) with the average turnover since the entity commenced (using whole months); or
  • 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).

Example new business

Creative Enterprise Company (CEC) incorporated on 4 November 2019 and commenced trading two weeks later. CEC cannot use the basic decline in turnover test as it does not have a comparison period.

CEC’s current GST turnover for the quarter ending 30 September 2020 (July, August and September 2020) is $5 million. Its current GST turnover for the comparison period is:

 

 

Month GST turnover
December 2019 $2,800,000
January 2020 $2,700,000
February 2020 $3,500,000
Total $9,000,000

December 2019 is the first whole month after CEC commenced trading.

When the comparison period for pre 1 March 2020 (December 2019 to February 2020) is compared to current GST turnover for the quarter ending 30 September 2020, the decline in turnover is 44.4% (($9,000,000-5,000,000)/9,000,000=44.4%).  CEC passes the alternative new business decline in turnover test.

If CEC had commenced on 4 December 2019 and only had two whole months of trading prior to 1 March 2020, it  would average its GST turnover for January and February 2020 and multiply the average by 3.

Month GST turnover
January 2020 $2,700,000
February 2020 $3,500,000
Total $6,200,000
Average monthly GST Turnover ($6,200,000/2) $3,100,000
Average monthly GST turnover multiplied by 3 $9,300,000

When pre 1 March 2020 GST turnover ($9,300,000) is compared to current GST turnover for the quarter ending 30 September 2020, the decline in turnover is 46.2% (($9,300,000-$5,000,000)/$9,300,000=46.2%).  CEC passes the alternative new business decline in turnover test.

Adapted from Explanatory Statement Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020

 

Disposals, acquisitions and restructures

An alternative test is available where there has been a disposal or acquisition of part of the business, or restructure in the business, or combinations of those, during the comparison period and this changed the entity’s current GST turnover.

The alternative test compares the GST turnover for the test period with the current GST turnover for the relevant month immediately after the disposal, acquisition or restructure, multiplied by 3. If there is not a whole month after the last acquisition, disposal or restructure, and before the turnover test period, then the month immediately before the turnover test period is used.

Where there have been multiple disposals, acquisitions or restructures, you can use the whole month immediately after any of the disposals, acquisitions or restructures, multiplied by 3 for the alternative test.

Example restructure

First Co’s GST turnover for the quarter ending 30 September 2020 (July, August and September 2020) was $200,000.

First Co acquired another business in December 2019. Because the acquisition took place during December 2019, First Co cannot use the 2019 September quarter as its comparison period. The first whole trading month after December 2020 is January 2020 which had GST turnover of $100,000.

The alternative test enables First Co to use the GST turnover from January 2020 of $100,000 and multiply this by 3 to determine its GST turnover for the comparison period.

Month GST turnover
January 2020 $100,000
Comparison period (January 2020 x 3) $300,000

First Co’s decline in turnover is 33.3% (($300,000-$200,000)/$300,000=33.3%). First Co passes the alternative new business decline in turnover test.

Adapted from Explanatory Statement Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020

If the business restructured during June 2020 then this means that there is not a whole month before the turnover test period (assuming it is a September 2020 quarter test period). As a result, you would use current GST turnover for the month of June 2020 (i.e., the month immediately before the test period), multiplied by 3 and compare this to current GST turnover for the September 2020 quarter.

 

Substantial increase in turnover

This alternative test applies to businesses that were on a strong growth path before the pandemic hit.

The test can be applied if turnover increased:

  • by 50% or more in the 12 months before the turnover test period or before 1 March 2020, or
  • by 25% or more in the 6 months before the turnover test period or before 1 March 2020, or
  • by 12.5% or more in the 3 months before the turnover test period or before 1 March 2020.

If the entity is using the period immediately before the turnover test period to determine whether there is a substantial increase in turnover, then the alternative test compares GST turnover for the test period (for example, the September 2020 quarter) with turnover for the 3 months immediately before the test period.

If the entity is using the period immediately before 1 March 2020 to determine whether there is a substantial increase in turnover, then the alternative test compares GST turnover for the test period (for example, the September 2020 quarter) with turnover for the 3 months immediately before 1 March 2020.

Example substantial increase

Blue Co was on a strong growth trajectory before the pandemic hit.

In February 2019, Blue Co’s GST turnover was $50,000 and $80,000 in February 2020. Over the 12 months between February 2019 and February 2020, Blue Co grew by 60% and is able to apply the substantial growth alternative test using 1 March 2020 as the reference point (as over the 12 month period, Blue Co grew by 50% or more).

Blue Co’s current GST turnover for the quarter ending 30 September 2020 was $150,000.

Blue Co’s GST turnover for the comparison period was:

Month GST Turnover
December 2019 $70,000
January 2020 $75,000
February 2020 $80,000
GST turnover $225,000

Blue Co’s decline in turnover is 33.3% (($225,000-$150,000)/$225,000=33.3%). Blue Co passes the alternative substantial increase decline in turnover test.

Adapted from Explanatory Statement Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020

 

Drought and natural disaster

This test is for businesses that were in (or partially in) a declared drought or natural disaster zone in 2019 as a result, do not have an appropriate comparison period.

Assuming the drought or disaster impacted GST turnover, the alternative test enables you to use a period in the year immediately preceding the year in which the drought or natural disaster was declared for the decline in turnover test comparison.

A declared drought zone includes an area subject to a formal declaration of drought by a Commonwealth, State, Territory or local government agency. It also includes an area for which there has been a public identification or acknowledgment that the area is drought affected by one of these agencies. See:

For disasters, see the ATO’s Specific disasters page.

Example drought

Manu’s business was impacted by drought in 2019 and the area where his business is located was declared a drought zone.

 

His current GST turnover for the September 2020 quarter is $260,000.

 

However, as his business was severely impacted by drought in the September quarter of 2019, he does not have a relevant comparison period. In 2018, his business was not in a declared drought zone and he uses the September 2018 quarter for his comparison period.

 

Month GST Turnover
July 2018 $120,000
August 2018 $120,000
September 2018 $140,000
GST turnover $380,000

The decline in turnover for Manu’s business is 31.6% (($380,000-$260,000)/$380,000=31.6%). Manu’s business passes the alternative drought/disaster decline in turnover test.

If the September quarter in 2018 was also in drought, Manu would look back to the 2017 September quarter. Manu’s comparison period is the closest year in which he wasn’t in a declared drought or natural disaster zone.

Adapted from ATO example

Sole trader or small partnership with sickness, injury or leave

For sole traders and small partnerships (i.e., 4 or fewer partners) with no staff, this test provides an alternative where the sole trader or partner has been sick, injured or was on leave during the comparison period.

In these cases, the month immediately before the month with sickness, injury or leave is used, then multiplied by 3. For example, if a sole trader was away in September 2019 and the time away has impacted on turnover, August 2019 is used instead and then multiplied by 3.

Example sole trader

Alex is a sole trader with no employees. His GST turnover for September 2020 was $150,000.

 

Alex wants to know if he can pass the decline in turnover test. However, Alex was sick and could not work for most of September 2019 and his illness had a major impact on his turnover – with no work, no money was coming in. Because his illness impacted his turnover, he cannot use the 2019 September quarter as his comparison period. Instead, he uses the turnover from August 2019 of $75,000, the month immediately before he got sick. He multiples this amount by 3 ($225,000) and compares this to the September 2020 quarter’s GST turnover.

 

Alex’s decline in turnover is 33.3% (($225,000-$150,000)/$225,000=33.3%). Alex passes the alternative decline in turnover test.

 

Adapted from Explanatory Statement Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020

 

Groups

If your business is part of a group, each entity and its employees need to meet the eligibility tests in their own right.

 

Special test for service entities

In circumstances where an employment entity is used within a business group and that employment entity is unable to demonstrate a sufficient decline in its own turnover, the employment entity can potentially refer to the decline in turnover of the operating entities it services. While this allows some special purpose service entities that provide employee labour to group members to access the JobKeeper scheme, access to this test does depend on the way the group is structured. The detail of this test is complex so please contact us if you think this test is likely to apply to your business.

If the test applies it will refer to the combined GST turnovers of the related group members using the services of the employer entity.

 

Not-for-profits

A number of modifications apply to not-for-profit entities when it comes to calculating GST turnover under the original decline in turnover test. It appears that the same modifications will generally also apply when determining whether a not for profit entity passes the new decline in turnover tests for the September 2020 and December 2020 quarters.

Wage condition

To be eligible to receive JobKeeper payments, the employer must meet a wage condition. That is, employers must have paid the eligible employee at least the applicable JobKeeper payment for the relevant fortnight.

The ATO reimburses the employer for the JobKeeper payment monthly in arrears.

As noted above, for the JobKeeper fortnights starting 28 September 2020 and 12 October 2020 the ATO is allowing employers until 31 October 2020 to meet the wage condition for all employees included in the JobKeeper scheme.

 

2. Eligible employees

From 3 August 2020, the eligibility tests for employees were changed to enable a greater number of employees to access JobKeeper.

Previously, an employee had to be employed by the relevant entity on 1 March 2020 to be eligible for JobKeeper payments. Someone employed as a casual on that date also must have been employed on a regular and systematic basis for the 12 month period leading up to 1 March 2020.

Now, employees who were previously ineligible for JobKeeper because they were not employed by the entity on 1 March 2020 may be able to receive JobKeeper payments if they were employed by the entity on 1 July 2020 and can fulfil all of the other eligibility requirements. If an employee already passed all the relevant conditions at 1 March 2020 then they don’t need to be retested using the 1 July 2020 test date.

  • On 1 July 2020 (previously 1 March 2020):
    • Was aged 16 years and over; and
    • If the individual was aged 16 or 17, was either financially independent or was not undertaking full-time study;
    • Was an employee other than a casual, or was a long-term casual*; and
    • Was an Australian resident (under the meaning of the Social Security Act 1991), or a resident for tax purposes and held a Subclass 444 (Special category) visa**.
  • And, at any point during the JobKeeper fortnight:
    • Was an employee of the employer (including employees that have been stood down or rehired); and
    • Was not an excluded employee:
      • An employee receiving parental leave pay or dad and partner pay; or
      • An employee receiving workers compensation payments in relation to total incapacity.
    • And, has provided the JobKeeper Payment Employee Nomination to the employer:
      • Agreeing to be nominated by the employer as an eligible employee under the JobKeeper scheme; and
      • Confirming that they have not agreed to be nominated by another employer; and
      • If they are a long-term casual, they do not have permanent employment with another employer.

*A ‘long term casual employee’ is a person who has been employed by the business on a regular and systematic basis during the period of 12 months that ended on the applicable testing date (previously 1 March 2020, but changing to 1 July 2020). These are likely to be employees with a recurring work schedule or a reasonable expectation of ongoing work.

 

3. JobKeeper payments

From 28 September 2020, the payment rate for JobKeeper will taper from the flat rate of $1,500 and split into a higher and lower rate.

JobKeeper payment 30 March to 27 September 2020 28 September to 3 January 2021 4 January 2021 to 28 March 2021
Worked 80 hours or more in the reference period ·       $1,500 per fortnight per employee ·  $1,200 per fortnight per employee or business participant ·  $1,000 per fortnight per employee or business participant
Worked less than 80 hours in the reference period ·  $750 per fortnight per employee or business participant ·  $650 per fortnight per employee or business participant

 

What’s a reference period?

  Reference period Hours
Eligible employees The 28 days finishing on the last day of the last pay period that ended before either:

·         1 March 2020, or

·         1 July 2020.

Actual hours worked including any hours for which they received paid leave (e.g., annual, long service, sick, carers and other forms of paid leave) or paid absence for public holidays. An employee’s ‘actual’ hours might be different to their contracted, ordinary hours or hours they are paid for.
Eligible business participants February 2020 (29 days) Active engagement in the business.
Religious practitioners February 2020 (29 days) Activities in pursuit of your vocation for your institution.

 

Eligible employees

Eligible employees that have been employed on a full time basis since 1 March 2020 or 1 July 2020 will generally receive the higher JobKeeper rate (as full time employees work more than 80 hours in 28 days) .

Businesses however will need to determine the rate applicable to eligible part-time and casual employees.

The reference period is the 28 day ending at the end of the most recent pay cycle for the employee ending before:

  • 1 March 2020; or
  • 1 July 2020.

For eligible employees who have been employed since 1 March 2020, employers need to 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.

For eligible employees employed since 1 July 2020, use the pay periods prior to 1 July 2020.

If the pay cycle is longer than 28 days, a pro-rata calculation needs to be done to determine the average hours worked and on paid leave across an equivalent 28 day period. For example, if the relevant monthly pay cycle has 31 days, you take the total hours for the month and multiply this by 28/31.

In order for an employer to receive JobKeeper payments from 28 September 2020 onwards you must notify the ATO of the payment rates for all eligible employees. The employer must then notify its employees within 7 days of advising the ATO of the payment rate.

Example – fortnightly pay cycle

Emma has been a permanent part-time employee of a bus company since 2010.

The company has a fortnightly pay cycle ending on Fridays. The bus company is an eligible employer as they have suffered a decline in turnover of more than 30%.

Using the company’s payroll cycle, Emma’s hours for the 1 July 2020 reference period are:

Payroll period Week Hours
23 May 2020 to 5 June 2020

 

Week 1 20
Week 2 19.5
6 June 2020 to 19 June 2020

 

Week 3 20
Week 4 19 annual leave
Total hours   78.5

Emma’s annual leave in February is included in her total hours as any hours for which an employee received paid leave (e.g., annual, long service, sick, carers and other forms of paid leave) or paid absence for public holidays, are included.

 

Emma’s hours for the 1 March 2020 reference period are:

Payroll period Week Hours
1 February 2020 to 14 February 2020

 

Week 1 20
Week 2 22
15 February 2020 to 28 February 2020

 

Week 3 20
Week 4 19
Total hours   81

Assuming the bus company continues to be eligible for JobKeeper payments, the company is eligible to receive the higher rate of $1,200 per fortnight between 28 September 2020 to 3 January 2021 for Emma, and $1,000 per fortnight for 4 January 2021 to 28 March 2021 assuming Emma remains employed.  This is because Emma worked 80 hours or more for the 1 March 2020 reference period. Had she worked less than 80 hours, she would be eligible for the lower rate of JobKeeper.

Adapted from the Explanatory Statement

 

Example – monthly pay cycle

Antonio has been a permanent employee of a Lai Industries since 2010.

The company has a monthly pay cycle that ends of the 15th of each month. The company is an eligible employer as they have suffered a decline in turnover of more than 30%.

Using the company’s payroll cycle, Antonio’s hours for the 1 July 2020 reference period are:

Payroll period Hours
16 May 2020 to 15 June 2020 (31 days) 85
Total hours over payroll period 85
Total hours over 28 day reference period 76.8

As the reference period is 28 days, Lai Industries need to pro-rata Antonio’s hours.

28 days/ 31 day payroll period x 85 (total hours worked over payroll period) = 76.8 hours.

 

Antonio’s hours for the 1 March 2020 reference period are:

Payroll period Hours
16 January 2020 to 15 February 2020 (31 days) 85 worked

80 leave

Total hours over payroll period 165
Total hours over 28 day reference period 149

28 days/ 31 day payroll period x 165 (total hours worked over payroll period) = 149 hours.

Assuming the Lai Industries continues to be eligible for JobKeeper payments, the company is eligible to receive the higher rate of $1,200 per fortnight between 28 September 2020 to 3 January 2021 for Antonio, and $1,000 per fortnight for 4 January 2021 to 28 March 2021 assuming Antonio remains employed.

Adapted from the Explanatory Statement

What happens if the reference period does not represent the employee’s typical arrangements?

Alternative tests are available where:

  • There reference period is not typical of the employee’s hours or you use a rostering system and there is no typical pattern in a 28 day period; or
  • The employee started work during the reference period.
Reference period not typical

Where the reference period is not typical of an employee’s hours, for example they took unpaid leave, or your business was in a drought or bushfire zone, or the employee was stood down etc., you can use an earlier 28 day period or multiple 28 day periods that more accurately represent the employee’s typical arrangements.

The reference period becomes the 28 day period ending at the end of the most recent pay cycle for the employee before 1 March 2020 or 1 July 2020 in which the employee’s total number of hours of work, of paid leave and of paid absence on public holidays was representative of a typical 28-day period. That is, you select the next 28 day period before 1 March 2020 or 1 July 2020 that represents the employee’s typical employment pattern.

Example – alternative payroll period

George has been a permanent part-time employee of a restaurant since 2018.

The company has a fortnightly pay cycle ending on Fridays. The restaurant is an eligible employer as they have suffered a decline in turnover of more than 30%. George did not work in May or June 2020.

Using the company’s payroll cycle, George’s hours for the 1 March 2020 reference period are:

Payroll period Week Hours
1 February 2020 to 14 February 2020 Week 1 18
Week 2 22
15 February 2020 to 28 February 2020 Week 3 0 unpaid leave
Week 4 24
Total hours   64

George typically works a minimum of 18 hours in any given week. However, in week 3, George took unpaid leave. As week 3 is not typical of George’s arrangement, the restaurant uses another 28 day period before 1 March 2020 that is typical of his arrangements.

Payroll period Week Hours
4 January 2020 to 17 January 2020

 

Week 1 24
Week 2 18
18 January 2020 to 31 January 2020 Week 3 22
Week 4 24
Total hours   88

Using the alternative test, George is eligible for the higher JobKeeper rate.

For workers that don’t have a typical pattern because of a rostering system like fly-in-fly-out workers, an average of the hours worked over the employee’s rostering schedule and proportionally adjusted over 28 days can be used to work out a typical 28-day period.

Employee started work during the reference period

Where an employee started work during the 28 days prior to either 1 March 2020 or 1 July 2020, you can use a forward-looking alternative test. In these circumstances, use the pay cycle immediately on or after 1 March 2020 or 1 July 2020. For employers with fortnightly or weekly pay cycles, you must use consecutive weeks.

Where an employee was stood down, use the first 28 day period starting on the first day of a pay cycle on or after 1 March 2020 or on or after 1 July 2020 in which they were not stood down.

Sale of business or changes within a group

Where the business changed hands or the employee changed employment within a wholly owned group, the hours worked with the previous employer cannot be counted. Instead, use the pay cycle immediately on or after 1 March 2020 or 1 July 2020. For employers with fortnightly or weekly pay cycles, you must use consecutive weeks.

If the employee has been stood down, use the first 28 day period starting on the first day of a pay cycle on or after 1 March 2020 or on or after 1 July 2020 in which they were not stood down.

What happens if employee salary is not linked to hours?

Some employees will automatically qualify for the higher JobKeeper payment rate. Broadly, this applies if the employer has incomplete records of total hours of work and paid leave, including where salary, wages, commissions, bonuses etc are not tied to an hourly rate or contracted rate.

The employee must also fall within specific categories, including:

  • They were paid at least $1,500 in the reference period;
  • They were required to work at least 80 hours under an industrial award, enterprise agreement or contract; or
  • It is reasonable to assume that they worked at least 80 hours during the applicable period.

Business owners and sole traders

The reference period for business participants is the month of February 2020 (the whole 29 days).

A business participant is a sole trader or self-employed with an ABN, or one partner in a partnership, adult beneficiary of a trust, director or shareholder who works in the business (i.e., only one person in a partnership, one beneficiary of a trust, or one director / shareholder can be eligible for JobKeeper payments for a particular entity).

The test to determine eligibility is based on the hours of active engagement in the business carried on by the entity. This requires an assessment of the hours that the business participant was actively operating the business or undertaking specific tasks in business development and planning, regulatory compliance or similar activities in an applicable reference period.

Other than sole traders and self-employed, a business participant must provide a declaration to the business entity confirming their hours worked over the reference period.

For JobKeeper payments from 28 September 2020, the business must notify the Tax Commissioner about whether the higher or lower rate applies to the business participant and notify the participant within 7 days of providing this notice to the Commissioner.

Where February 2020 was not typical of the participant’s hours, an alternative test can be used:

  • Not typical – use the next typical 29 day period
  • Commenced work during February 2020 – use March 2020
  • Not employed by the employer but still an eligible religious practitioner for JobKeeper purposes – use March 2020

 

Religious practitioners

The reference period for eligible religious practitioners is the month of February 2020.

A religious practitioner is a minister of religion or a full time member of a religious order who undertakes activities in pursuit of their vocation as a member of a religious institution.

The payment rates are based on the number of hours they spent doing an activity, or series of activities, in pursuit of their vocation as a religious practitioner as a member of the religious institution in the reference period. For example:

  • Performance of the rituals or practices of the religious institution (including participation in services, prayer, contemplation or meditation, insofar as they constitute such rituals or practices); and
  • Furtherance of the objectives of the religious organisation (including missionary or charitable work, insofar as they constitute such an objective).

The religious practitioner must provide a declaration to their institution confirming their hours worked over the reference period.

For JobKeeper payments from 28 September 2020, religious institutions must notify the Tax Commissioner about whether the higher or lower rate applies to each of their eligible religious practitioners and notify the practitioner within 7 days of providing this notice to the Commissioner.

Where February 2020 was not typical of the practitioner’s hours, an alternative test can be used:

  • Not typical – use the next typical 29 day period
  • Commenced work during February 2020 – use March 2020
  • Not employed by the employer but still an eligible religious practitioner for JobKeeper purposes – use March 2020

 

JobKeeper fortnights

 

  JobKeeper fortnight     Payment rate
1 30 March 2020 – 12 April 2020 JobKeeper 1.0 Eligibility period 1 $1,500 per fortnight
2 13 April 2020 – 26 April 2020
3 27 April 2020 – 10 May 2020
4 11 May 2020 – 24 May 2020
5 25 May 2020 – 7 June 2020
6 8 June 2020 – 21 June 2020
7 22 June 2020 – 5 July 2020
8 6 July 2020 – 19 July 2020
9 20 July 2020 – 2 August 2020
10 3 August 2020 – 16 August 2020
11 17 August 2020 – 30 August 2020
12 31 August 2020 – 13 September 2020
13 14 September 2020 – 27 September 2020
14 28 September 2020 – 11 October 2020 JobKeeper 2.0 Eligibility period 2 High rate: $1,200

Low rate: $750

15 12 October 2020– 25 October 2020
16 26 October 2020 – 8 November 2020
17 9 November 2020 – 22 November 2020
18 23 November 2020 – 6 December 2020
19 7 December 2020 – 20 December 2020
20 21 December 2020 – 3 January 2021
21 4 January 2021 – 17 January 2021 Eligibility period 3 High rate: $1,000

Low rate: $650

22 18 January 2021 – 31 January 2021
23 1 February 2021 – 14 February 2021
24 15 February 2021 – 28 February 2021
25 1 March 2021 – 14 March 2021
26 15 March 2021 – 28 March 2021

 

 

Business Survival and Adaptation Package – $3 billion to support Victorian businesses

Business Survival and Adaptation Package – $3 billion to support Victorian businesses

 

About the package

The Victorian Government is investing $3 billion to help businesses impacted by ongoing restrictions and prepare for COVID Normal business.

$3 billion in cash grants, tax relief and cashflow support will be delivered to Victorian businesses that have been most affected by coronavirus (COVID-19) restrictions.

 

Business Survival

  • Small and medium sized business ($822 million): The third round of the Business Support Fund will provide up to $20,000 for business with a payroll of up to $10 million:
  • Licensed Hospitality Business ($251 million): Grants of up to $30,000 for licensed pubs, clubs, hotels, bars, restaurants and reception centres, based on their venue capacity and location.
  • Business Chambers and Trader Groups ($3 million): A competitive grants program to support metropolitan and regional business chambers and trader groups.
  • Alpine businesses ($4.3 million): Grants of up to $20,000 to help alpine businesses pay a service charge to Alpine Resort Management Boards.

Business Adaptation

The package also provides additional funding, tools and resources to help businesses adapt and prepare for reopening under COVID normal settings.

  • $20 million voucher program to assist sole traders and small businesses in building their digital capability
  • $15.7 million package to help Victorian exporters get their products to market and establish new trade channels.
  • $8.5 million expansion to the ‘Click for Vic’ campaign to encourage more Victorians to support local businesses.

Waivers and deferrals

The Government is also providing $1.8 billion in tax and cashflow support.

  • $1.7 billion in payroll tax deferrals for the full 2020-21 financial year
  • $41 million to bring forward the 50% stamp duty discount for commercial and industrial property for all of Regional Victoria.
  • $33 million to defer the planned increase in the landfill levy for six months
  • $30 million to waive 25% of the Congestion Levy this year, with the outstanding balance deferred.
  • $27 million in liquor license fee waivers for 2021
  • $6 million to waive Vacant Residential Land Tax for vacancies in 2020.

Third Round of Business Support Fund Grants

 

What support is available?

The amount of grants available from this program range from $10,000 to $20,000 depending on the business’ annual payroll. To be eligible for a grant from this program, applicants must:

  • operate a business located within Victoria; and
  • participate in the Commonwealth Government’s JobKeeper Payment scheme; and
  • employ people and be registered with WorkSafe; and
  • have had an annual payroll of less than $10 million in 2019-20; and
  • be registered for Goods and Services Tax (GST); and
  • hold an Australian Business Number (ABN); and
  • be registered with the responsible Federal or State regulator.

An eligible business will receive:

  • $10,000 if its annual payroll is less than $650,000
  • $15,000 if its annual payroll is between $650,000 and $3 million
  • $20,000 if its payroll is between $3 million and $10 million.

A full list of the eligibility criteria for a grant will be published when applications open.

How to apply

Applications will open soon.

 

Source: Business.vic.gov.au & Image: Explore Melbourne

New JobKeeper test date for employees and additional flexibility

New JobKeeper test date for employees and additional flexibility

On Friday 14 August 2020, the Treasurer released the updated JobKeeper Rules dealing with eligible employees which apply from 3 August 2020 onwards. Specific rules dealing with JobKeeper 2.0 have not yet been released.

 

New test date for employees

Under the original JobKeeper rules, an employee generally needed to have been employed by the entity at 1 March 2020 and to have met certain conditions as at that date to qualify as an eligible employee. However, the Government has updated the rules to ensure that 1 July 2020 will be relevant test date rather than 1 March 2020 from 3 August 2020 onwards, which means that some additional employees might become eligible for JobKeeper from the 10th JobKeeper fortnight onwards. Employees who met the conditions at 1 March 2020 will continue to be eligible assuming they are still employed by the entity etc.

 

In practical terms this means:

 

  • If someone commenced employment with an entity after 1 March 2020 but by 1 July 2020 and they were an employee of the entity on that date then they can potentially be eligible for JobKeeper from 3 August 2020 onwards, assuming all other basic conditions are met.
  • Casuals who hadn’t been employed for at least 12 months leading up to 1 March 2020 can potentially be eligible for JobKeeper if they have been employed on a regular and systematic basis for at least 12 months leading up to 1 July 2020 (assuming all other basic conditions are met).
  • Individuals who failed the age-related conditions or residency conditions at 1 March 2020 can potentially be eligible employees if they met those conditions on 1 July 2020.

 

Employers need to ensure that they identify all additional employees who could be eligible for JobKeeper to ensure that they comply with the “one in, all in” principle and that they meet the nomination requirements.

 

Extended deadline for top-up payments

Crucially, the ATO has announced that the deadline for making payments for new eligible employees for JobKeeper fortnights starting on 3 August 2020 and 17 August 2020 has been extended to 31 August 2020 (ie, to meet the condition for employers to pay at least $1,500 to eligible employees in each JobKeeper fortnight).

 

Employees who have moved to a new employer

The other key change to the rules is that someone who was previously nominated for JobKeeper with an entity as an eligible employee or eligible business participant can potentially be nominated for JobKeeper with a different entity if certain conditions are met. The individual must have ceased to be employed or actively engaged in the business (as a business participant) of the original entity after 1 March 2020 but before 1 July 2020. They must also meet the conditions to be treated as an eligible employee of the new employer at 1 July 2020.

JobKeeper 2.0 V4 – Detailed Guide

JobKeeper 2.0 V2

JobKeeper 2.0 V2

 

Employees that previously failed the JobKeeper eligibility test as they were not employed on 1 March 2020, may now be eligible for payments from 3 August 2020 if they were employed on 1 July 2020.

 

To receive JobKeeper from 28 September 2020, employers will need to reassess their eligibility with reference to actual GST turnover for the September 2020 quarter (for JobKeeper payments between 28 September to 3 January 2021), and again for December 2020 quarter (for payments between 4 January 2021 to 28 March 2021).

From this date, the JobKeeper payment rate will reduce and split into a higher and lower rate based on the number of hours the employee worked.

To access JobKeeper payments from 28 September 2020, there are two questions that need to be assessed:

  • Is your business eligible? and
  • What JobKeeper rate applies to eligible employees?

We’ve summarised the key details for employers on JobKeeper 2.0 in this client update, but just remember that the proposed changes are not yet law and the details could still change.

From 28 September 2020, the second tranche of the JobKeeper scheme changes the eligibility tests for employers and employees, and the method and amount paid to eligible employees.

 

Eligibility

 

To receive JobKeeper from 28 September 2020, employers will need to reassess their eligibility with reference to actual GST turnover for the September 2020 quarter (for JobKeeper payments between 28 September to 3 January 2021), and again for December 2020 quarter (for payments between 4 January 2021 to 28 March 2021).

 

Eligible employers

 

The broad eligibility tests to access JobKeeper remain the same with an extended decline in turnover test.

  • On 1 March 2020, carried on a business in Australia or was a non‑profit body pursuing its objectives principally in Australia; and
    • before the end of the JobKeeper fortnight, it met the decline in turnover test*:
      • >15% for an ACNC-registered charity (excluding universities, or schools within the meaning of the GST Act – these entities need to meet the basic turnover test)
      • >50% for large businesses:
        • aggregated turnover for the test period is likely to be $1 billion or more, or aggregated turnover for the previous year to the test period was $1 billion or more (a small business that forms part of a group that is a large business must have a >50% decline in turnover to satisfy the test).
      • ­>30% for all other qualifying entities.
    • And, was not:
      • on 1 March 2020, subject to Major Bank Levy for any quarter ending before this date, a member of a consolidated group and another member of the group had been subject to the levy; or
      • a government body of a particular kind, or a wholly-owned entity of such a body; or
      • at any time in the fortnight, a provisional liquidator or liquidator has been appointed to the business or a trustee in bankruptcy had been appointed to the individual’s property.

 

1 March 2020 is an absolute date. An employer that had ceased trading, commenced after 1 March 2020, or was not pursuing its objectives in Australia at that date, is not eligible.

*Additional tests apply from 28 September 2020.

 

Additional decline in turnover tests

 

To receive JobKeeper payments from 28 September 2020, businesses will need to meet the basic eligibility tests and an extended decline in turnover test based on actual GST turnover.

  30 March to 27 September 2020 28 September to 3 January 2021 4 January 2021 to 28 March 2021
Decline in turnover

Projected GST turnover for a relevant month or quarter is expected to fall by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.*

Actual GST turnover in the September 2020 quarter (July, August & September) fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.

The decline for the quarter needs to be met to continue receiving JobKeeper payments.

Actual GST turnover in the December 2020 quarter (October, November & December)fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019. The decline for the quarter needs to be met to continue receiving JobKeeper payments.

 

Alternative tests potentially apply where a business fails the basic test and does not have a relevant comparison period.

 

Most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility. However, as the BAS deadlines are generally not due until the month after the end of the quarter, eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees. However, the ATO will have discretion to extend the time an entity has to pay employees in order to meet the wage condition.

Alternative arrangements are expected to be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group). 

 

Alternative tests

 

The Commissioner of Taxation will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019. These alternative tests have not as yet been released.

 

Eligible employees

 

The Government has announced that employee eligibility tests will change from 3 August 2020 onwards.

Under the current version of the JobKeeper scheme, an employee must generally have been employed by the relevant entity on 1 March 2020 to be eligible for JobKeeper payments. Someone employed as a casual on that date also must have been employed on a regular and systematic basis for the 12 month period leading up to 1 March 2020.

However, these proposed changes mean that employees who were previously ineligible for JobKeeper because they were not employed by the entity on 1 March 2020 may now be able to receive JobKeeper payments if they were employed by the entity on 1 July 2020 and can fulfil all of the other eligibility requirements.

 

  • On 1 July 2020 (previously 1 March 2020):
    • Was aged 16 years and over; and
    • If the individual was aged 16 or 17, was either financially independent or was not undertaking full-time study;
    • Was an employee other than a casual, or was a long-term casual*; and
    • Was an Australian resident (under the meaning of the Social Security Act 1991), or a resident for tax purposes and held a Subclass 444 (Special category) visa**.
    • And, at any point during the JobKeeper fortnight:
      • Was an employee of the employer (including employees that have been stood down or rehired); and
      • Was notan excluded employee:
        • An employee receiving parental leave pay or dad and partner pay; or
        • An employee receiving workers compensation payments in relation to total incapacity.
        • And, has provided the JobKeeper Payment Employee Nominationto the employer:
          • Agreeing to be nominated by the employer as an eligible employee under the JobKeeper scheme; and
          • Confirming that they have not agreed to be nominated by another employer; and
          • If they are a long-term casual, they do not have permanent employment with another employer.

 

*A ‘long term casual employee’ is a person who has been employed by the business on a regular and systematic basis during the period of 12 months that ended on the applicable testing date (previously 1 March 2020, but changing to 1 July 2020). These are likely to be employees with a recurring work schedule or a reasonable expectation of ongoing work.

 

JobKeeper payments

 

From 28 September 2020 the payment rates for JobKeeper will reduce and split into a higher and lower rate.

Whether an eligible employee can access the higher or lower rate will depend on the number of hours they worked during a 4 week test period. The Government indicates that the higher rate will apply to employees who worked at least 20 hours a week on average in the four weeks of pay periods prior to either 1 March 2020 or 1 July 2020.

 

JobKeeper 30 March to 27 September 2020 28 September to 3 January 2021 4 January 2021 to 28 March 2021
Payment
  • $1,500 per fortnight per employee
  •  $1,200 per fortnight per employee or business participant who worked > 20 hours per week
  • · $750 per fortnight per employee or business participant working < 20 hours per week
  • $1,000 per fortnight per employee or business participant who worked > 20 hours per week
  • $650 per fortnight per employee or business participant working < 20 hours per week

 

Assessing if an employee has worked 20 hours or more

 

JobKeeper payments from 28 September 2020 are paid at a lower rate for employees who worked less than 20 hours per week on average in the four weeks of pay periods before 1 March 2020 and the four weeks of pay periods before 1 July 2020.

The Commissioner of Taxation will have discretion to set out alternative tests for those situations where an employee’s or business participant’s hours were not usual during February or June 2020. Also, the ATO will provide guidance on how this will be dealt with when pay periods are not weekly. This guidance is not as yet available.

Can I keep getting JobKeeper until September?

 

If your business and your employees passed the original eligibility tests to access JobKeeper, and you have fulfilled your wage requirements, you can continue to claim JobKeeper up until the last JobKeeper fortnight that ends on 27 September 2020.

ATO Assistant Commissioner Andrew Watson said in a recent interview, “Once you’re in, you’re in to the end of September. If you meet the eligibility test once, you’re in it for the whole time.” The original eligibility test was a once only test although there are ongoing conditions that need to be satisfied for each JobKeeper fortnight.

 


JobKeeper fortnights

 

JobKeeper fortnight     Payment rate
1 30 March 2020 – 12 April 2020

JobKeeper 1.0

Eligibility period 1

$1,500 per fortnight

2 13 April 2020 – 26 April 2020
3 27 April 2020 – 10 May 2020
4 11 May 2020 – 24 May 2020
5 25 May 2020 – 7 June 2020
6 8 June 2020 – 21 June 2020
7 22 June 2020 – 5 July 2020
8 6 July 2020 – 19 July 2020
9 20 July 2020 – 2 August 2020
10 3 August 2020 – 16 August 2020
11 17 August 2020 – 30 August 2020
12 31 August 2020 – 13 September 2020
13 14 September 2020 – 27 September 2020
14 28 September 2020 – 11 October 2020

JobKeeper 2.0

Eligibility period 2

High rate: $1,200

Low rate: $750

15 12 October 2020– 25 October 2020
16 26 October 2020 – 8 November 2020
17 9 November 2020 – 22 November 2020
18 23 November 2020 – 6 December 2020
19 7 December 2020 – 20 December 2020
20 21 December 2020 – 3 January 2021
21 4 January 2021 – 17 January 2021

Eligibility period 3

High rate: $1,000

Low rate: $650

22 18 January 2021 – 31 January 2021
23 1 February 2021 – 14 February 2021
24 15 February 2021 – 28 February 2021
25 1 March 2021 – 14 March 2021
26 15 March 2021 – 28 March 2021

 

 

 

JobSeeker and other support

 

Coronavirus supplement

The Coronavirus supplement will continue, albeit on a reduced rate of $250 per fortnight (from $550), from 25 September until 31 December 2020 for eligible individuals.

 

27 April to 24 September 2020 $550 per fortnight
25 September to 31 December 2020 $250 per fortnight

 

Eligibility remains the same. That is, those receiving:

 

  • JobSeeker Payment (and all payments transitioning as a result of JobSeeker Payment)
  • Youth Allowance
  • Parenting Payment (Partnered and Single)
  • Austudy
  • ABSTUDY Living Allowance
  • Farm Household Allowance
  • Special Benefit
  • Eligible New Enterprise Incentive Scheme participants
  • Department of Veterans’ Affairs Education Schemes

 

The eligibility criteria and some of the tests for access to income support is changing.

 

Eligibility and access

The expanded eligibility criteria for the Jobseeker Payment and the Youth Allowance Jobseeker will continue to apply until 31 December 2020:

 

  • Permanent employees who have been stood down or lost their jobs (and are not receiving payments from an employer or through insurance),
  • Sole traders, the self-employed, casuals or contractors who meet the income and assets tests.

 

In addition, if you receive JobSeeker or Youth Allowance payments, the amount you can earn before impacting income support has been increased to $300 per fortnight from 25 September 2020 until 31 December 2020.

 

However, a number of restrictions have been reintroduced.

 

Reintroduction of assets and partner income tests

From 25 September 2020, the assets test and the Liquid Assets Waiting Period (applies to those with assets such as cash savings worth over $5,500 for singles or $11,000 for singles with children and partnered people) will be reintroduced for access to income support payments.

 

In addition, partner income testing will resume from 25 September, albeit with higher thresholds than those pre coronavirus. That is, you will not be eligible for income support if you are not earning an income but your partner earns $3,086.11 per fortnight or $80,238.89 per annum. The partner income test taper rate will increase from 25 cents for every dollar of partner income earned over $996 per fortnight to 27 cents for every dollar of partner income earned over $1,165 per fortnight.

 

Reintroduction of job seeking requirements

Job seeking requirements that were suspended from 24 March 2020 have been introduced from 9 June 2020. The mutual obligation requirements include:

 

  • Voluntary job searches
  • At least one phone or online appointment with a jobseeker’s employment services provider
  • Voluntary participation in activities, either online or in person, and
  • No payment suspensions or penalties for failure to comply.

 

Waiting periods continue to be waived

Some waiting periods for access to income support will continue to be waived until 31 December 2020:

  • The one-week ordinary waiting period is waived.
  • The newly arrived resident’s waiting period for new migrants (previously four years). Claimants will still need to meet residency requirements, that is they will need to hold a permanent visa. Affected claimants will need to serve the remainder of this waiting period at the end of the period the Coronavirus Supplement is paid for.
  • The Seasonal Work Preclusion Period for those who are eligible for the Coronavirus supplement -this applies to those who finished seasonal, contract or intermittent work in the six months prior to claiming income support.
$2.5 bn JobTrainer package: What you need to know

$2.5 bn JobTrainer package: What you need to know

 

The Government has announced the $2.5bn JobTrainer package to retrain, upskill and open new job opportunities.

JobTrainer for job seekers and school leavers

 

An additional 340,700 training places will be created to provide no or low cost courses into sectors with job opportunities. The Government is working with the States and Territories to develop a list of qualifications and skill sets to be covered by the program.

JobTrainer for employers

 

The JobTrainer package has expanded the number of businesses that can access the 50% apprentice wage subsidy and extends the subsidy until 31 March 2021 (from 30 September 2020).

Originally, only businesses with less than 20 employees or larger employers employing apprentices/trainees let go by a small business were able to access the subsidy (for wages paid to apprentices employed by them as at 1 March 2020).

Now, businesses with under 200 employees can access the subsidy for apprentices employed from 1 July 2020.

Employers will be reimbursed 50% of an eligible apprentice’s wage up to a maximum of $7,000 per quarter per apprentice.

Employers will be able to access the subsidy after an assessment by the Australian Apprenticeship Support Network.

Eligibility

 

For small business:

  • Employ fewer than 20 people, or
  • A small business with fewer than 20 people, using a Group Training Organisation, and
  • the apprentice or trainee was undertaking an Australian Apprenticeship with you on 1 July 2020 for claims after this date. Claims prior to 1 July 2020, will continue to be based on the 1 March 2020 eligibility date.

Claims are open now for small business.

For medium sized businesses:

  • Employ 199 people or fewer, or
  • A medium sized business with 199 people or fewer, using a Group Training Organisation, and
  • the apprentice or trainee was undertaking an Australian Apprenticeship with you on 1 July 2020.

Claims open 1 October 2020 for medium sized businesses.

You will need to provide evidence of wages paid to the apprentice. If the business subsequently is unable to retain the apprentice, another business can access the incentive if they then employ and pay wages to the apprentice.

Final claims for payment must be lodged by 30 June 2021.

How does the apprenticeship subsidy and JobKeeper work together?

 

They don’t. It is one or the other.

An employer will not be eligible to claim the apprentice wage subsidy for any period where they choose to claim the JobKeeper payment for the same apprentice.

An employer or Group Training Organisation will not be eligible for the JobKeeper payment where the employer is in receipt of an Australian Government wage subsidy for the same Australian Apprentice (for example Supporting Apprentices and Trainees and the Australian Apprentice Wage Subsidy).

 

 

 

 

 

 

 

HomeBuilder: What is it and how do you access it?

HomeBuilder: What is it and how do you access it?

The Government has announced grants of $25,000 to encourage people to build a new home or substantially renovate their existing home.

The HomeBuilder scheme targets the residential construction market by providing tax-free grants of $25,000 to eligible owner-occupiers, including first home buyers, to build a new home or substantially renovate their existing home.

The grants will be distributed by the revenue office of the State or Territory where you live or plan to live.

There are a few complexities to this grant that both home builders/renovators and the building industry need to be across before jumping in and signing a new contract on the expectation that the grant will apply.

Eligibility

Eligibility criteria apply to the individuals applying for the grant and the building project:

Individual eligibility

The HomeBuilder scheme is available to owner occupiers including first home buyers. It is not accessible to owner builders, developers or investors.

To be eligible you need to be:

  • An individual (not a company or trust); and
  • 18 years of age or older; and
  • An Australian citizen.

And, you need to meet the income test. To be eligible, you cannot earn more than:

  • Individuals – $125,000 based on your 2018-19 or later tax return
  • Couples – $200,000 based on both of your 2018-19 or later tax returns

The building project eligibility

The building contract must be signed between 4 June 2020 and 31 December 2020. And, the construction or renovation must commence within three months of the contract date.

The grants are available if you build a new home or renovate a home to live in (your principal place of residence) where:

New home*The property value (house and land) does not exceed $750,000
Renovation**Substantially renovate your existing home, where: The renovation contract is between $150,000 and $750,000, and The value of your existing property (house and land) does not exceed $1.5 million

* house, apartment, house and land package, off-the-plan, etc.

** renovation works must be to improve the accessibility, safety and liveability of the dwelling. It cannot be for additions to the property (such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages (unconnected to the property)).

If you own or have purchased land but have not signed a contract to build your home, you may meet the eligibility criteria if you:

  • Own a property (house and land), and knock down the house to rebuild – this will be counted as a substantial renovation, and therefore subject to the renovation price range of $150,000 to $750,000 provided the total value (house and land) of the property does not exceed $1.5 million pre-renovation;
  • Own vacant land before 4 June 2020, and then build, the total value of the land and new build cannot exceed $750,000; or
  • Buy the land after 4 June 2020, and then build, the total value of the land and build cannot exceed $750,000.

Integrity measures and pricing

Building contracts must be at arms-length, that is, the parties cannot be related or connected.

Renovations or building work must be undertaken by a registered or licenced building service ‘contractor’ (depending on the state or territory you live in) and named as a builder on the building licence or permit.

When it comes to price, the terms should be commercially reasonable, and the contract price should not be inflated compared to the fair market price. The rules enable the purchaser to request that the builder demonstrate that the contract price for the new build or substantial renovation is no more than a comparable product (measured by quality, location and size) as at 1 July 2019.

Interaction with first home owner grant schemes

The HomeBuilder grant does not exclude first home buyers from accessing other grants and concessions such as the First Home Owner Grant, stamp duty concessions, the First Home Loan Deposit Scheme, and First Home Super Saver Scheme.

Problem areas

As the building contract is entered into before the grant is approved, it will be important that the grant is not essential to finance the building project, just in case the grant is not approved. In addition, as the builder needs to commence work within three months of the contract date, it will be important to ensure that the contract recognises the commencement dates.