Thinking | 10 August 2020

JobKeeper 2.1

By Anthony Bradica, David Catanese and Adam Dimac

On 7 August 2020 the Government announced some modifications to JobKeeper 2.0, which would make it accessible to more businesses and their employees. While the modifications will apply nationwide, the Government expects that more than 80% of the increased payments will flow to Victorian businesses and employees suffering from the strict lockdown restrictions.

This follows the Government’s other recent announcement on 21 July 2020 that it would extend the JobKeeper program by six months from 28 September 2020 to 28 March 2021 (JobKeeper 2.0). Our summary of JobKeeper 2.0 can be found here.

The table below sets out the changes announced as part of JobKeeper 2.1.

JobKeeper 2.0JobKeeper 2.1Comments
To be eligible for JobKeeper Payments for the period 28 September 2020 to 3 January 2021, entities will need to meet a modified decline in turnover test. Entities will need to show that they have met the decline in turnover test in the June and September 2020 quarters, with reference to their actual GST turnover and relative to comparable periods (generally the corresponding quarters in 2019). Existing decline in turnover percentage requirements, (ie 50%, 30% and 15%) will remain in place.To be eligible for JobKeeper Payments for the period 28 September 2020 to 3 January 2021, entities will need to meet a modified decline in turnover test. Entities will need to show that they have met the decline in turnover test for the September 2020 quarter only, with reference to their actual GST turnover and relative to comparable periods (generally the corresponding quarters in 2019). Existing decline in turnover percentage requirements, (ie 50%, 30% and 15%) will remain in place.This will benefit businesses that did not suffer the requisite decline in their turnover in the June 2020 quarter, but have subsequently suffered a substantial decline. In particular, this will benefit Victorian businesses that will suffer from the lockdown restrictions.
To be eligible for JobKeeper Payments for the period 4 January 2021 to 28 March 2021, entities will need to meet a modified decline in turnover test. Entities will need to show that they have met the decline in turnover test in the June, September and December 2020 quarters, with reference to their actual GST turnover and relative to comparable periods (generally the corresponding quarters in 2019). Existing decline in turnover percentage requirements, (ie 50%, 30% and 15%) will remain in place.To be eligible for JobKeeper Payments for the period 4 January 2021 to 28 March 2021met the decline in turnover test for the December 2020 quarter only, with reference to their actual GST turnover and relative to comparable periods (generally the corresponding quarters in 2019). Existing decline in turnover percentage requirements, (ie 50%, 30% and 15%) will remain in place.This will benefit businesses that do not suffer the requisite decline in their turnover in the June and/or September 2020 quarters, but subsequently suffer a substantial decline in the December 2020 quarter. In particular, this will benefit Victorian businesses that have suffered due to the lockdown restrictions, and businesses that struggle to recover.
The relevant date of employment remained 1 March 2020 (ie to be eligible for JobKeeper an employee must have been employed as at 1 March 2020).From 3 August 2020, the relevant date of employment will move from 1 March to 1 July 2020 (ie to be eligible for JobKeeper an employee must have been employed as at 1 July 2020).The change extends eligibility to an individual who:

• was a fulltime employee on or before 1 July 2020; and
• became a long-term casual employee (employed on a regular and systematic basis for at least 12 months) between 1 March 2020 and 1 July 2020.

As the change will apply from 3 August 2020, this will increase the amount of employees that are eligible under the existing JobKeeper Scheme (covering four existing JobKeeper Fortnights). It will also increase the amount of employees that are eligible under JobKeeper 2.1.
JobKeeper 2.0 introduced tiered payment amounts for employees based on the hours of work of each employee immediately prior to the reference date of 1 March 2020. Employees who averaged more than 20 hours per week in this period will be paid the higher tier amount, and those who averaged less than 20 hours per week in this period the lower tier amount. The tiered payments apply from 28 September 2020.Under JobKeeper 2.1, the assessment of which tier each employee falls within will be based on the period immediately before reference dates of either 1 March 2020 or 1 July 2020.

If an employee was employed on both of those dates, the assessment period will be the period immediately prior to the reference date in which the employee worked the higher number of hours.
The change means that employees whose hours of work have increased from below 20 hours per week at 1 March 2020 to more than 20 hours per week at 1 July 2020 will be entitled to the higher tier amount (whereas previously they would only receive the lower tier amount).

The change also ensures that employees who have decreased their hours of work from 1 March 2020 to 1 July 2020 will continue to be entitled to the higher tier amount, provided they worked more than 20 hours per week at 1 March 2020.

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