Jobkeeper Extension: Are You Still Eligible?

Parliament has extended the JobKeeper scheme to operate until 28 March 2021.

There are several key changes to the structure of the subsidy scheme that both employers and employees should be aware of moving forward. Eligibility criteria has been relaxed, there are two separate extension periods and the payment rate will be two-tiered.

Key Changes

Most importantly, there are actually two separate extension periods – 28 September 2020 to 3 January 2021 followed by 4 January 2021 to 28 March 2021.

For each extension period, employers will be required to reassess their eligibility for the JobKeeper scheme. Eligibility for each period will be based on the business or not-for-profits’ actual turnover in the preceding quarter only, relative to the comparable 2019 quarter. Due to this, employers may be eligible for the second extension period even if they are not eligible for the first.

Where there is no relevant comparison quarter in 2019, the Australian Tax Office has recently registered the Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No 2) 2020 which sets out seven alternative tests to determine eligibility for the JobKeeper scheme. Employers only have to satisfy one of the alternative tests to be eligible, but employers do not have to consider these tests if they have already satisfied the basic decline in actual GST turnover test.

The seven alternative tests are:

1. Business that started after the comparison period started but before 1 March 2020;
2. Business acquisition or disposal that changes the entities turnover;
3. Business restructure that changed the entities turnover;
4. Business that has had a substantial increase in turnover;
5. Business affected by drought or natural disaster;
6. Business that has an irregular turnover; and
7. Sole trader or small partnership with sickness, injury or leave.

There is further detailed information on each of these alternative tests on the Australian Tax Office website here.

Employee eligibility is also now being assessed from 1 July rather than 1 March. This change allows for more employees to be eligible employees under the scheme. An employer cannot claim the JobKeeper payment for an employee first employed by them after 1 July.

The amount of the JobKeeper payment will be split over two tiers and will be determined by the number of hours worked by the employee in the two fortnightly pay periods preceding either 1 March 2020 or 1 July 2020. The higher of the two, if the employee was eligible at both dates, will be the hours used to determine the applicable payment rate. It should be noted that the subsidy amount will decrease from the first extension period to the second.

Details of these key changes are set out in the table below.