JobKeeper Extension - The Essential Facts You Need to Know
The ATO has provided more details regarding the JobKeeper extension commencing 28 September 2020.
The Government has extended JobKeeper payments by six months from 28 September 2020 to 28 March 2021. The payment rate for eligible employees will reduce at 28 September 2020, reducing again from 4 January 2021.
To claim payments for the first extension period from 28 September 2020 to 3 January 2021, you need to demonstrate that your actual GST turnover has fallen in the September 2020 quarter, relative to the corresponding quarter in 2019 (or a comparable period).
To claim for the second period from 4 January to 28 March 2021, in January 2021 you will need to demonstrate a fall in turnover in the December 2020 quarter relative to the December 2019 quarter (or a comparable period).
For more on employer eligibility, refer to Extension of the JobKeeper Payment: https://www.ato.gov.au/General/JobKeeper-Payment/JobKeeper-extension-announcement/?=redirected_URL
Decline in Turnover Test
If you are registered for GST and have outstanding BAS statements, you should lodge your BAS for the September 2019 and December 2019 quarters as soon as possible (or for equivalent months, if you report monthly). BAS statements not lodged may hold up your application for JobKeeper payments under the JobKeeper extension. You do not need to re-enrol for the JobKeeper extension if you are already enrolled for JobKeeper for fortnights before 28 September. Lodging your BAS is all you need to do.
The actual decline in turnover test is satisfied for JobKeeper Extension 1 when your current GST turnover for the quarter ending 30 September 2020 (July, August and September) has declined by the specified shortfall percentage (usually 30%) in comparison to your current GST turnover for the quarter ending 30 September 2019.
The actual decline in turnover test is satisfied for JobKeeper Extension 2 when your current GST turnover for the quarter ending 31 December 2020 (October, November and December) has declined by the specified shortfall percentage (usually 30%) in comparison to your current GST turnover for the quarter ending 31 December 2019.
Employee Tier Levels
During the two JobKeeper extension periods, there will be a higher Tier 1 and lower Tier 2 JobKeeper rate.
The higher Tier 1 rate applies to:
- eligible employees who were working for 20 hours or more a week on average in the four weeks before either 1 March 2020 or 1 July 2020; and
- eligible business participants who were actively engaged in the business for 20 hours or more per week on average in February 2020.
The Tier 2 rate applies for other eligible employees and business participants who worked less than 20 hours per week on average in the four weeks before 1 March and 1 July 2020.
For fortnights 14 to 20 (28 September 2020 to 3 January 2021) the tier rates are:
- Tier 1 - $1,200 per fortnight
- Tier 2 - $750 per fortnight
- For fortnights 21 to 27 (28 September 2020 to 28th March 2021) the tier rates are:
- Tier 1 - $1,000 per fortnight
- Tier 2 - $650 per fortnight
Employee Tier Level Notification
For businesses still eligible to claim the JobKeeper wage subsidy, you need to nominate the rate you are claiming for each eligible employee or business participant. To do this: -
- In your accounting software, use the "Other Allowances" field to report the payment using JK-TIER 1 and JK–TIER2 allowance codes.
- If the employee is eligible for Tier 1, insert the description 'JK-TIER1'.
- If the employee is eligible for Tier 2, insert the description 'JK-TIER2'.
- These codes must be entered exactly to prevent significant delays or reimbursement failure.
- Process a 0.01 cent payment in the applicable JK-TIER1 or JK-TIER2 code for each eligible employee by no later than 31 October.
- Important: If you do not send the tier rate for eligible employees to the ATO via an STP pay event file in October, you will not be able to claim a payment for JobKeeper fortnights from 28 September.
- Authorise your STP pay event file a minimum of 72 hours prior to completing your October JobKeeper Employer Declaration in early November.
- Note: You can start sending the one cent tier allowances now if you have already assessed your businesses eligibility for the extension, and you have identified employee tier levels.
- The ATO also require you to notify employees in writing of the rate they will receive. This has to be done by no later than 7 days after notifying the ATO of the tier level.
For more information, refer to Reporting Eligible Employees: https://www.ato.gov.au/General/JobKeeper-Payment/In-detail/Reporting-eligible-employees-and-JobKeeper-top-up-payments-via-STP/#BK_2Tiernotificationestablishinganemploy
Date for October Payments
The ATO has extended the cut-off date for JobKeeper top-up payments for fortnights 14 and 15 to 31 October 2020.
The ATO will accept that the minimum $1,200 or $750 payment for fortnights 14 (28 September – 11 October) and 15 (12 - 25 October) have been met, if employees have been paid at least $2,400 or $1,500 between 28 September and 31 October 2020.
Payment can be spread over multiple payments across this period, or via a single payment.
A reminder that the recorded pay date is the crucial date for JobKeeper payments, not the pay process or EFT release dates.
Businesses Not Eligible for the Extension
Businesses that are not eligible after fortnight 13 (14 -27 September): -
- do not have to send a finish code to the ATO for their employees
- should notify their employees
Where an individual employee is no longer eligible for JobKeeper payments, though the business remains eligible, a JobKeeper finish code is to be entered for the employee within the relevant reporting period (month) they are no longer eligible.
The ASGA also recommends contacting your Accountant if you require further clarification of the new JobKeeper eligibility criteria, rules and reporting processes.