The JobKeeper wage subsidy introduced in April 2020 will end on 27 September 2020 and will be replaced by "JobKeeper 2.0" on 28 September 2020. JobKeeper 2.0 will be available until 28 March 2021 with additional eligibility criteria and a two-tier payment system with lower rates of pay for eligible recipients.
The extension of the JobKeeper system acknowledges the ongoing impact felt by businesses despite many states undergoing a gradual return to normal operations. It also signals the likelihood of stand downs continuing well into 2021.
JobKeeper 2.0 payment rates
From 29 September 2020 to 3 January 2021, the two-tier payment rate will consist of:
- $1,200 payment per fortnight for all eligible employees whose normal working hours are 20 hours or more per week; and
- $750 payment per fortnight for employees whose normal working hours are less than 20 hours per week.
From 4 January 2021 until 28 March 2021, the payment rates will be further decreased to:
- $1,000 payment per fortnight for employees whose normal working hours are 20 hours or more per week; and
- $650 payment per fortnight for employees whose normal working hours are less than 20 hours per week.
"Normal working hours" will be determined by looking at how many hours an employee worked on average in the four weeks before 1 March 2020. The Commissioner of Taxation will have discretion to set out alternative tests where an employee's hours were not usual during the four weeks before 1 March 2020 (e.g. where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February 2020).
Businesses and not-for-profits will still need to prove that they have experienced reductions in turnover of:
- 50% for businesses that have an aggregated annual turnover of over $1 billion;
- 30% for businesses that have an aggregated annual turnover of $1 billion or less; or
- 15% for Australian Charities and not-for-profits Commission-registered charities (excluding schools and universities).
Employers seeking to claim JobKeeper payments from 28 September 2020 will be required to reassess their eligibility for JobKeeper 2.0 with reference to their actual turnover in the June 2020 and September 2020 quarters (rather than projected GST turnover). Businesses will need to demonstrate they meet the decline in turnover test in both of those quarters to be eligible for JobKeeper from 28 September to 3 January 2021.
To be eligible for JobKeeper from 4 January to 28 March 2021, businesses will need to demonstrate they have met the turnover test in each of the three previous quarters to remain eligible for the March 2021 quarter.
Generally when determining a fall in actual GST turnover, the turnover will be compared to relative comparable periods (e.g. the corresponding quarters in 2019). The Commissioner of Taxation will have discretion to set out alternative tests for eligibility in circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019.
Self-employed people remain eligible where they meet the relevant turnover test and are not a permanent employee of another employer.
Other eligibility criteria for businesses and not-for-profits, and their employees, remain unchanged.
What does this mean for JobKeeper enabled stand down?
There have been no proposed changes to the provisions permitting employers to utilise JobKeeper enabled stand down directions. The extension of the JobKeeper scheme clearly evinces an intention that ongoing stand down of employees up to at least 28 March 2021 is a real possibility. However, it is important to understand that any form of stand down cannot be a "set and forget".
If your business needs to continue reductions in hours for some or all staff, this is something that needs to be tested on a regular basis and assessed based on the prevailing circumstances of the business. It is likely we will continue to see an ever increasing number of challenges to the amount of JobKeeper payments and use of stand down in the Fair Work Commission.
This need not deter employers if the conditions necessitate the use of stand down but clear and continued communication with staff about the ongoing impact of COVID-19 on the business is a way in which to mitigate this risk.