Update to JobKeeper Rules

On 14 August 2020, the Government provided more details about extending the JobKeeper employment test for JobKeeper fortnights beginning on, or after 3 August 2020.

Key Points

• From 3 August, the eligible employee test has been extended to include individuals who were employed on 1 July 2020 (previously 1 March 2020) and are not currently nominated for JobKeeper by another entity. See Eligible Employees
• For the fortnights commencing 3 and 17 August 2020, the Tax Office will provide employers until 31 August to meet the wage condition for all new eligible employees included in the JobKeeper scheme under the 1 July eligibility test
• On 21 July, the government announced proposed changes to JobKeeper including an extension through to 28 March 2021. These changes do not impact JobKeeper payments until after 28 September 2020
• You can enrol for the JobKeeper payment until the program closes if your circumstances have changed, for example Victorian businesses closed due to restrictions. Check if you are eligible at  Enrol for JobKeeper
• Requirement to issue nomination notices to employees and obtain required confirmation from new employees by 21 August 2020.

These new rules do not apply to any entitlements payable for JobKeeper fortnights ending on or before 2 August 2020. To qualify in this period, employees had to be employed at 1 March 2020, not be employed as an eligible employee or business participant of another entity.

Employees that satisfied the 1 March 2020 employee testing requirement on or before 2 August 2020 do not need to re-test their eligibility with reference to the new 1 July 2020 employee testing date.

Employed at 1 March 2020 but not eligible at 1 March 2020  

Relevant to employees employed on 1 March 2020 but who were not eligible for JobKeeper because they:

• Were not long term casual employees (i.e. not employed on a regular and systematic basis for over 12 months).
• Did not satisfy the JobKeeper age requirements (i.e. 16 or 17 years of age but not living independently or undertaking full-time study).
• Were not holding a permanent resident visa or Subclass 444 visa (e.g. New Zealand citizens).

In the four months from 1 March 2020 to 1 July 2020, circumstances may have changed that employees may have met the relevant conditions (e.g. long term casual employees, JobKeeper age requirements or residency requirements) by 1 July 2020.

Newly eligible employees only employed after 1 March 2020

Relevant for businesses that employed new workers after 1 March 2020 and these workers are still employed as at 1 July 2020 with the current business, even if such workers were previously employed or were an eligible business participant in previous businesses prior to 1 July 2020.

Important note: Because the application of the re-employment rule is different from 3 August 2020, where a new employee resigns from a former employer who was eligible for JobKeeper payments and joins a new employer before 1 July 2020 (and is still employed at 1 July 2020 by only the new employer), such an employee will not qualify for JobKeeper for fortnights ending on or before 2 August 2020 but will qualify for JobKeeper for fortnights starting from 3 August 2020 in respect of the new employment.

Re-employing of former employees

Relevant for employers who qualified for JobKeeper payments under the 1 March 2020 employment test rules, but after 1 March 2020, the employee ceased to be employed but is then subsequently re-hired by the same employer before 1 July 2020.

To qualify for JobKeeper in this scenario, no other entity must have qualified for JobKeeper payments in respect of that individual for any JobKeeper fortnight in the interim period. Such an employee will qualify as a 1 March employee.

For the fortnights beginning 3 August 2020 and 17 August 2020, businesses have until 31 August 2020, instead of before the end of the fortnight, to satisfy the wage conditions in respect of newly eligible employees. That is to pay the wages of newly eligible employees before the ATO pays the $1,500 JobKeeper allowance to the employer.

JobKeeper Payment Rate

From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:

• $1,200 per fortnight for all eligible employees who were working in the business or not-for-profit for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average; and
• $750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:

• $1,000 per fortnight for all eligible employees who were working in the business or not for-profit for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for business participants who were actively engaged in the business for 20 hours or more per week on average; and
• $650 per fortnight for other eligible employees and business participants. Businesses and not-for-profits will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants).

You are receiving this email as you are a client of MNH Advisory Services Pty Ltd. The information (including taxation) contained within this document is of a general nature only and neither represents nor is intended to be advice on any particular matter.