As part of the Federal Government’s initial response to the Covid-19 pandemic the JobKeeper scheme assisted to keep businesses afloat (and employees employed) through the payment of employee wage subsidies.
As the original JobKeeper scheme ended on 28 September 2020 and the effects of the Covid-19 pandemic are continuing, the Federal Government introduced the replacement ‘JobKeeper 2.0’ scheme to apply from 28 September 2020 to 28 March 2021.
As with the original JobKeeper scheme, JobKeeper 2.0 operates by providing eligible employers with fixed fortnightly wage subsidies (JobKeeper payments) that the employer is required to pass on to all eligible employees.
However, JobKeeper 2.0 provides two different rates of JobKeeper payments which reduce part-way through the life of the scheme as follows:
28 September 2020 to 3 January 2021 (Quarter 1):
$1,200 per fortnight for:
- eligible employees who worked 20 hours or more a week on average in the four week pay periods before either 1 March 2020 or 1 July 2020
- eligible business participants who were actively engaged in the business for 20 hours or more per week on average
$750 per fortnight for all other eligible employees and business participants
4 January 2021 to 28 March 2021 (Quarter 2):
$1,000 per fortnight for:
- eligible employees who worked 20 hours or more a week on average in the four week pay periods before either 1 March 2020 or 1 July 2020
- eligible business participants who were actively engaged in the business for 20 hours or more per week on average
$650 per fortnight for other eligible employees and business participants
Amongst other things:
- to be eligible for the JobKeeper 2.0 scheme, employers must have a GST turnover of less than $1 billion and must be able to demonstrate a decline in actual GST turnover of 30% or more for Quarter 1 and/or Quarter 2 compared to the same quarter in 2019
- employers with a GST turnover of more than $1 billion will also be eligible provided they can demonstrate a decline in actual GST turnover of 50% or more for the relevant quarters
- employers who were eligible under the original JobKeeper scheme are not required to re-register for JobKeeper 2.0 provided they meet and can demonstrate the above GST turnover requirements
Critically, the JobKeeper 2.0 scheme continues to allow employers to issue JobKeeper stand-down directions to their eligible employees, to make unilateral changes to eligible employees’ duties and location of work, and to request eligible employees agree to changes to their ordinary working hours.
Employers must still ensure any such directions and arrangements strictly comply with the mandated legal administrative requirements (eg, notice and consultation obligations).
Action Items
All eligible employers (including those grandfathered from the original JobKeeper scheme) must:
- notify the ATO of all eligible employees, business participants, and their associated rates of pay in respect of the quarters covered by the JobKeeper 2.0 scheme
- work closely with their accountants to ensure their GST turnover has been correctly calculated for each quarter, and ensure these amounts continue to meet the relevant turnover test requirements
- continue to pay their eligible employees at least the value of the JobKeeper subsidy each fortnight, including if any eligible employees are ordinarily paid less than this amount or would not be entitled to this amount due to stand-down
- ensure all business participants declare to the ATO if their active involvement with the business exceeds 20 hours or more per week on average in a four week pay period in order to avoid potential costly repayment obligations
