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JobKeeper Extension 1

Most business owners know that following the monthly declaration for September, that there have been changes to the JobKeeper subsidy.

The extensions to JobKeeper requires business owners to re-assess their ongoing eligibility for the reduced rates of payment.

Eligibility

This extension 1 period will run from 28 September 2020 to 3 January 2021 and is generally available for businesses that are eligible employers.

To be eligible for extension 1 you will need to show that your actual GST turnover has declined in the September 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019), for most businesses this will require a decline of at least 30 percent.

To work out which supplies you have made in the turnover test period, you must use the accounting basis you used for GST reporting purposes.

This means it’s important to be either BAS ready or have lodged your September 2020 BAS and the that for the corresponding period in 2019.

If you are not registered for GST, you will work out your turnover using either the GST cash or non-cash basis of accounting.

You can provide additional turnover information to demonstrate that you satisfy the actual decline in turnover test for the September quarter from the start of October onwards. You must provide it before you complete your November monthly declaration.

Currently our clients fall into one of three categories, they are not eligible, they are eligible, or they are uncertain of eligibility.

  • If you are not eligible for extension 1, review how much you are paying each employee as JobKeeper minimum amounts will no longer apply.
  • If you are eligible, you need to be aware of the information below.
  • If you are unsure, you still have time to access your eligibility and ensure you pay all of your employees appropriately to ensure you remain an eligible employer.

The Rates of Payment

The rate of the JobKeeper payment in each extension period will depend on the number of hours an eligible employee works, or an eligible business participant is actively engaged in the business.

It will be split into two rates.

Tier 1 rate: Tier 2 rate:
This rate applies to:

  • eligible employees who worked for 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 provide a declaration to that effect.

 

This rate applies to:

  • any other eligible employees and eligible business participants.

 

*To find out how to apply the 80-hour threshold CLICK HERE

Employers and businesses will need to nominate the rate they are claiming for each eligible employee and/or eligible business participant.

The rates of the JobKeeper payment in this extension period are:

  • Tier 1: $1,200 per fortnight (before tax)
  • Tier 2: $750 per fortnight (before tax).

31 October 2020 – wage condition for JobKeeper extension 1

For the JobKeeper fortnights starting 28 September 2020 and 12 October 2020 only, the ATO is allowing employers until 31 October 2020 to meet the wage condition for all employees included in the JobKeeper scheme.

  • pay your eligible employees at least the JobKeeper amount that applies to them each JobKeeper fortnight. For JobKeeper extension 1, this will be either $1,200 for tier 1 or $750 for tier 2.

Do You Still Need Help?

Contact VBD as soon as possible to ensure that you take the appropriate actions before it’s too late.

 

General Advice Warning: The information provided is of a general nature only and has been prepared without taking into account your financial objectives, situation or needs. These should be considered before you act on any information considered in any article and you may want to seek independent professional advice before making a decision.

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