On Monday 28 of September the highly publicised JobKeeper 2.0 came into effect.
Members should be aware that going forward there are two extension periods:
Extension 1: From 28 September 2020 to 3 January 2021. The rates for JobKeeper in this period are:
Tier 1: $1200 per fortnight (before tax)
Tier 2: $750 per fortnight (before tax)
Extension 2: From 4 January 2021 to 28 March 2021
Tier 1: $1000 per fortnight (before tax)
Tier 2: $650 per fortnight (before tax)
The Tier 1 rate applies to employees who worked more than 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and eligible business participants who were actively engaged in the business for 80 hours or more in February and provided a declaration to that effect.
The Tier 2 rate applies to any other eligible employee and business participants.
With the implementation of JobKeeper 2.0 comes a number of supportive legislative instruments related to:
The ATO has also clarified that employers do not need to re-enrol to claim payments in the first extension period if they are already enrolled in JobKeeper. They just need to check their continuing eligibility and submit that information to the ATO from 1 October 2020. Employers will however still need to take action if they are moving from JobKeeper 1.0 to becoming a legacy employer if they wish to utilise the Fair Work Act 2009 flexibilities.
The Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020 address matters relevant to the implementation of the JobKeeper extension – providing the specific details on matters such as the basic decline in turnover test (with a slight nuance for new entrants) and the payment rates.
Worth highlighting is Rules 9A and 4A, which set out how to calculate whether the higher or lower rate applies to an eligible employee. The higher rate applies for eligible employees who worked more than 80 hours in the 28-day period ending at the end of the most recent pay cycle for the employee that ended before either 1 March or 1 July 2020.
Employer Obligation
An employer must notify the ATO which payment tier they are claiming for each eligible employee in their relevant monthly business declaration. Within 7 days of giving the ATO that notice, an employer must notify each employee of the rate applicable to them. The ATO has advised that it will allow employers until 31 October 2020 to meet the wage condition for the fortnights from 28 September and 12 October.
The ATO has issued two determinations with respect to the determining whether the higher or lower JobKeeper payment amount applies in non-standard scenarios.
The Coronavirus Economic Response Package (Payments and Benefits) Alternative Reference Period Determination 2020 applies to provide an alternative reference period for determining whether the higher or lower JobKeeper payment amount applies, in circumstances where the standard reference period may not be appropriate. This includes in relation to the following scenarios with respect to eligible employees:
The Coronavirus Economic Response Package (Payments and Benefits) Higher Rate Determination 2020 sets out the specified circumstances where the higher JobKeeper payment amount will be taken to apply, in circumstances where the hours in a reference period are not able to be easily ascertained.
The Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020 sets out alternative tests where there is not an appropriate comparison period in 2019 for the purposes of satisfying the decline in turnover test in JobKeeper 2.0.
The Rules include the same alternative decline in turnover tests as per the first iteration of JobKeeper – however with minor modifications to account for the slight difference in the basic test in JobKeeper 2.0 when compared with the first iteration of JobKeeper (e.g. ‘actual’ v ‘projected’ turnover, and comparison with a particular quarter).
The Fair Work Amendment (Jobkeeper Payments) Regulations 2020(JobKeeper Regulations) support the extension for ‘legacy employers’ of the temporary workplace flexibility measures in the Fair Work Act.
A legacy employer can use some of the JobKeeper provisions in the Fair Work Act 2009 (with some changes) for their previously eligible employees if they:
The regulations provide a method of determining an employee’s ordinary hours for the purposes of JobKeeper enabling stand down directions for certain classes of employees for whom it is not possible or appropriate to assess their ordinary hours as at 1 March 2020, for example because they don’t have ordinary hours as at 1 March 2020 as they were not yet employed (see regulation 6.07C).
This regulation was issued in support of the implementation of s.789GJA of the Fair Work Act which allows a legacy employer, when certain conditions have been met, to give an employee a JobKeeper enabling stand down direction to no less than 60% of the employee’s ordinary hours as at 1 March 2020 (i.e. their ordinary hours before the impact of COVID-19).
The JobKeeper Regulations also contain a provision which ensures that any modifications to the calculation of the decline in turnover test in the JobKeeper Payment Rules are also picked up for the purposes of the 10% decline in turnover test in the Fair Work Act (regulation 6.07B).
The Coronavirus Economic Response Package (Payments and Benefits) (Timing of Supplies Made and Decline in Turnover Test) Rules 2020 (No. 1) sets out the time or times a supply is treated as being made for the purposes of calculating an entity’s current GST turnover in a test period other than projected GST turnover. Under this instrument, a supply must be treated as being made or partly made in a relevant test period to the extent that any GST payable on the supply would be attributed to that test period.
