Parliament passed a Bill this week to extend the end point of the JobKeeper program. The current program ends on 27 September, and JobKeeper 2.0 will run for the six-month period 28 September 2020 to 28 March 2021. However, this change in law merely extends the timeframe during which JobKeeper payments can be made. The details for JobKeeper 2.0, eligibility, two-tiered payment rates, etc, will be set out in the Rules legislative instrument.
Awaiting JobKeeper 2.0 Rules
So far, we only have fact sheets for JobKeeper 2.0 issued by Treasury, covered here in an earlier update, but the updated Rules are expected soon. Once issued, hopefully they will clarify the following:
- Confirm the new decline in turnover tests for eligibility
- Measuring hours worked to determine whether an eligible employee is above or below the 20-hour average, which determines payment at the higher or lower rate
- Practical issues with measuring number of hours “actively engaged” for eligible business participants
Under the Rules, the ATO determines alternative decline in turnover tests where there isn’t a comparable period last year. We are also waiting on these for JobKeeper 2.0, which will be relevant for the September and December 2020 quarters.
The new laws provide for what are informally called legacy employers. These are employers who qualified under the existing JobKeeper program, but do not qualify for JobKeeper 2.0. They will be a legacy employer if they satisfy a new 10% decline in turnover test. Legacy employers, although not receiving JobKeeper 2.0 payments, can continue to access modified temporary flexibility measures in the Fair Work Act during the JobKeeper 2.0 period.
Qualifying as a legacy employer is broken down into three sub-periods during JobKeeper 2.0’s 28 September to 28 March 2021 period. The 10% decline in turnover test must be re-tested for each sub-period, tied respectively to the June, September and December 2020 quarters. A key difference with this turnover test is that you must obtain a certificate per sub-period confirming that the 10% decline has been met. The certificate can only be provided by a tax agent, BAS agent, or a member of one of the professional accounting bodies.
An employer with fewer than 15 employees is exempted from having to get the above certificate. Instead, they can have an authorised person with knowledge of their financial affairs make a statutory declaration that the 10% decline in turnover test is satisfied for an applicable quarter.
Confirmation of employer rights and obligations under the Fair Work Act should be determined through advice from an appropriate legal advisor.
We look forward to the clarification of the abovementioned matters. In the meantime, talk to your trusted Nexia advisor for any assistance leading up to the commencement of JobKeeper 2.0 on 28 September.