According to the explanatory statement of the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8), the rules ensure that JobKeeper is “tapered in the December 2020 and March 2021 quarters and provides targeted assistance to entities that need assistance the most”.
JobKeeper 2.0 will replace the current flat $1,500 a fortnight subsidy with a two-tiered system.
The subsidy will consist of a $750 fortnightly payment for those working under 20 hours pre-COVID and $1,200 per fortnight for others.
This well then be reduced further from January next year to $650 and $1,000, respectively.
To qualify for any type of JobKeeper payments for JobKeeper fortnights beginning on or after 28 September 2020, an entity must satisfy the new actual decline in turnover test for the quarter applicable to the fortnight.
For JobKeeper fortnights between 28 September 2020 and 3 January 2021 (inclusive), the applicable quarter is the quarter ending 30 September 2020. For JobKeeper fortnights between 4 January 2021 and 28 March 2021 (inclusive), the applicable quarter is the quarter ending 31 December 2020.
Under the new test, the entity must have had an actual decline in its turnover for the applicable quarter relative to its comparable quarter in 2019.
According to the legislation, the percentage decline for the quarter for the entity under the new test must be equal to or greater than the required percentage decline in turnover of 15 per cent, 30 per cent or 50 per cent (as applicable).
The statement advises that the new actual decline in turnover test applies in conjunction with the original decline in turnover test.
Entities that have already qualified for the JobKeeper scheme prior to 28 September 2020 are not required to apply the original decline in turnover test again, however entities that have not previously participated in the scheme are required to demonstrate that they satisfy both the original decline in turnover test and the new decline in turnover test.
For most entities, the original decline in turnover test compares the ‘projected GST turnover’ in relation to any of the following:
· a calendar month that ends after 30 March 2020 and before 1 October 2020;
· the quarter ending on 30 June 2020; or
· the quarter ending on 30 September 2020.
In addition, the amendments modify the original decline in turnover test to give entities the choice to compare the ‘projected GST turnover’ in relation to any of the following:
· a calendar month that ends after 30 September 2020 and before 1 January 2021; or
· the quarter ending on 31 December 2020.
Due to the additional requirement to test decline in actual GST turnover twice under the extended scheme, the Commissioner of Taxation will have additional powers to specify how turnover is determined for the purposes of the new test to ensure compliance costs are minimised.
According to an example given by the explanatory statement, a company that did not participate in the JobKeeper scheme between 30 March and 27 September 2020, but experienced a decline in its turnover over August and September greater than 30 per cent qualifies for the extension, subject to meeting all other qualifying requirements.
According to the example, the company must meet:
- the original decline in turnover test – the company's decline in projected GST turnover for the quarter ending on 30 September 2020, must be greater than the required 30 per cent; and
- the new actual decline in turnover test – the company must have experienced an actual decline in turnover for the quarter ending on 30 September 2020 that was greater than the required 30 per cent rate.
For JobKeeper fortnights beginning on or after 4 January 2021, the business will need to test its actual decline in turnover with reference to the quarter ending 31 December 2020 to determine if it continues to qualify for JobKeeper payments.
The explanatory memorandum underlines that the company cannot qualify for JobKeeper payments for JobKeeper fortnights between 30 March 2020 and 27 September 2020 because it had not previously elected to participate in the scheme.
The statement also gives the example of a company that had been receiving JobKeeper payments since the commencement of the scheme, but did not remain a qualifying entity for the extension on and after 28 September 2020, because it did not meet the actual decline in turnover requirements.
In early January 2021, the company assesses that it had a 45 per cent decline in turnover for the quarter ended 31 December 2020 compared to the relevant comparison period and therefore satisfies the actual decline in turnover test for JobKeeper fortnights beginning on and after 4 January 2021. According to the statement, as the company has previously participated in the JobKeeper scheme, it does not need to specifically retest its qualification based on the original decline in turnover test.
Having previously qualified, the company does not need to notify the Commissioner that it elects to participate in the JobKeeper scheme again, however, it must meet all other qualifying requirements, including the wage condition.
Example three paints a picture of a company that has not been receiving JobKeeper payments because its business has not been significantly affected by COVID-19. The company, however, experiences a significant decline in the December 2020 quarter and satisfies the original decline in turnover test and the actual decline in turnover test.
To receive the payment, the company must then notify the Commissioner that they elect to participate in the JobKeeper scheme, as well as meet other qualifying requirements, including the wage condition.