JobKeeper 2.0: new rules released

The new JobKeeper Rules for the six-month extension have been released (Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020).

While the new JobKeeper Rules implement the Government’s previous announcements (see our articles on JobKeeper 2.0 and some subsequently proposed changes, which we dubbed JobKeeper 2.1), they also create a degree of complexity which will (understandably) leave many businesses confused; and looking for specialist advice.

While this may have been somewhat unavoidable, it is not ideal that struggling businesses will need to seek advice to access a measure which is intended to keep them afloat (particularly when many are calling for tax reform and simplification).

The Australian Taxation Office (ATO) has also updated its website guidance to reflect the release of the new JobKeeper Rules.

Importantly, the ATO website flags a number of new notification requirements, including the requirement to notify both the ATO and eligible individuals about the applicable payment rate (discussed below).

The ATO website also notes that un-lodged Business Activity Statements (BAS) may hold up applications for JobKeeper Payments under the JobKeeper extension (particularly for the September and December 2019 quarters).

The table below sets out the changes contained in the new JobKeeper Rules for the JobKeeper fortnights that occur from 28 September 2020 until 28 March 2021.

28 September 2020 to 3 January 2021
To qualify for JobKeeper payments for JobKeeper fortnights between 28 September 2020 and 3 January 2021: • Projected GST Turnover Test – an entity must satisfy the original decline in turnover test. That is, the entity must show that its ‘projected GST turnover’ for a ‘test period’ has declined relative to a comparable period (generally the corresponding period in 2019). Existing decline in turnover percentage requirements (ie 50%, 30% and 15%) will remain in place. However, the new JobKeeper Rules extend the test period to give an entity the choice to compare its ‘projected GST turnover’ in relation to any of the following:      - calendar month between October 2020 and December 2020 (inclusive); or      - the December 2020 quarter. • Actual GST Turnover Test – an entity must show that its current GST turnover (referred to as ‘actual’ GST turnover) has declined in the September 2020 quarter, with reference to its current GST turnover in a comparable period (ie the September 2019 quarter). Existing decline in turnover percentage requirements (ie 50%, 30% and 15%) will remain in place.	The amendments do not modify the requirement that an entity must meet the original projected GST turnover test, other than to allow testing for a relevant period from 1 October to 31 December 2020 (to allow new entities to access the Scheme). However, entities must now satisfy both a projected and actual GST turnover test. Entities that have already participated in the JobKeeper Scheme prior to 28 September 2020 are not required to apply the original projected decline in turnover test again (as they have already satisfied this test). However, entities that have not previously participated in the JobKeeper Scheme are required to demonstrate that they satisfy both tests. Given the overlap between the test periods, entities that meet the actual decline in turnover test for the September 2020 quarter would also be expected to meet the original projected decline in turnover test for that quarter.
For JobKeeper fortnights between 28 September 2020 and 3 January 2021, the JobKeeper payment will be: • $1200 per fortnight for each eligible employee, if the employee’s total hours of work, paid leave and paid absence on public holidays was 80 hours or more for one of the following ‘reference periods’:      - the 28‑day period ending at the end of the most recent ‘pay cycle’ for the employee that ended before 1 March 2020; or      - the 28‑day period ending at the end of the most recent ‘pay cycle’ for the employee that ended before 1 July 2020; or • otherwise, $750 per fortnight for each eligible employee. A pay cycle for an employee is defined as a regular period for which the entity would usually pay the employee in relation to the performance of work.	This will generally only be relevant for part-time employees or long-term casual employees, as full-time employees would typically be expected to have worked the required minimum number of hours. The payment rates noted above for JobKeeper fortnights between 28 September 2020 and 3 January 2021 also apply to business participants and religious practitioners. However, the relevant reference period is February 2020. Business participants will need to show that they were actively engaged in the business of the relevant entity for 80 hours or more in February 2020. Religious institutions will need to show that the relevant religious practitioner spent 80 hours or more doing the relevant activities in pursuit of their vocation as a religious practitioner and as a member of the religious institution. Generally, these activities would include (but are not limited to) the: • 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).
4 January 2021 to 28 March 2021
To qualify for JobKeeper payments for JobKeeper fortnights between 4 January 2021 and 28 March 2021: • Projected GST Turnover Test – an entity must satisfy the original decline in turnover test. That is, the entity must show that its ‘projected GST turnover’ for a ‘test period’ has declined relative to a comparable period (generally the corresponding period in 2019). Existing decline in turnover percentage requirements (ie 50%, 30% and 15%) will remain in place. However, the new JobKeeper Rules extend the test period to give an entity the choice to compare its ‘projected GST turnover’ in relation to any of the following:      - calendar month between October 2020 and December 2020 (inclusive); or      - the December 2020 quarter. • Actual GST Turnover Test – an entity must show that its current GST turnover (referred to as ‘actual’ GST turnover) has declined in the December 2020 quarter, with reference to its current GST turnover in a comparable period (ie the September 2019 quarter). Existing decline in turnover percentage requirements, (ie 50%, 30% and 15%) will remain in place. For JobKeeper fortnights between 4 January 2021 and 28 March 2021, the JobKeeper payment will be: • $1000 per fortnight for each eligible employee, if the employee’s total hours of work, paid leave and paid absence on public holidays was 80 hours or more for one of the following ‘reference periods’:      - the 28‑day period ending at the end of the most recent ‘pay cycle’ for the employee that ended before 1 March 2020; or      - the 28‑day period ending at the end of the most recent ‘pay cycle’ for the employee that ended before 1 July 2020; or • otherwise, $650 per fortnight for each eligible employee. A pay cycle for an employee is defined as a regular period for which the entity would usually pay the employee in relation to the performance of work. If the pay cycle for an employee is longer than 28 days, a pro‑rata proportion of the total hours of work, paid leave and paid absence on public holidays of the employee in the pay cycle is to be used.	The amendments do not modify the requirement that an entity must meet the original projected GST turnover test, other than to allow testing for a relevant period from 1 October to 31 December 2020. However, entities must now satisfy both a projected and actual GST turnover test. Entities that have already participated in the JobKeeper Scheme prior to 4 January 2021 are not required to apply the original projected decline in turnover test again (as they have already satisfied this test). However, entities that have not previously participated in the JobKeeper Scheme are required to demonstrate that they satisfy both tests. Given the overlap between the test periods, entities that meet the actual decline in turnover test for the December 2020 quarter would also be expected to meet the original projected decline in turnover test for that quarter. Importantly, an entity is not excluded from qualifying for JobKeeper payments for JobKeeper fortnights beginning on or after 4 January 2021 simply because the entity did not qualify between 28 September 2020 and 3 January 2021 (ie the first half of the JobKeeper Extension). While the JobKeeper payment rate changes for JobKeeper fortnights between 4 January 2021 and 28 March 2021, the method of determining which rate applies remains the same. Again, this will generally only be relevant for part-time employees or long-term casual employees, as full-time employees would typically be expected to have worked the required minimum number of hours.
Deductible gift recipients
The new JobKeeper Rules do not modify any of the specific eligibility requirements for deductible gift recipient (DGR) entities. Broadly, for DGR entities, the definition of the terms ‘current GST turnover’ and ‘projected GST turnover’ are modified so that each deductible gift or contribution received, or likely to be received, in a period (other than from an associate) results in the following treatment: • the entity is treated as making, or as likely to make (as the case requires), a supply in the period for consideration; and • the value of the supply is treated as being equal to the amount of the gift (if the gift is money) or the market value of the gift (if the gift is not money).	This modification was previously inserted into the JobKeeper Rules in order to ensure that DGR entities would be able to apply, and meet, the projected decline in turnover test. It will continue to apply for the projected decline in turnover test, as well as the new actual decline in turnover test.