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  • Writer's pictureCDG Chartered Accounting

Jobkeeper 2.0 – What if I do not meet the new turnover tests?

Jobkeeper has now been going since March, and millions of people across Australia are currently receiving its payments, but as of September 27th, 2020, Jobkeeper is due to change. What changes to Jobkeeper are being implemented? What are the new Jobkeeper Rates? What are the new eligibility criteria? We have a separate post on how to qualify for Jobkeeper 2.0 in the coming months, and what those payments look like, but this post will cover what it means if you no longer qualify for Jobkeeper payments.

Before we get to that, see below a few key facts for Jobkeeper 2.0:

- Current Flat Rate of $1500 per fortnight expires on 27th of September 2020

- Extension Period 1 (EP1) from 28th September 2020 to 3rd January 2021

- Extension Period 2 (EP2) from 4th January 2021 to 28th March 2021

- Must demonstrate actual GST turnover drop of specified rate for EACH extension

- Implementation of two rates based on average hours of work pre-Jobkeeper

- Over 20 hours a week on average pre-Covid (Class 1*)

- Under 20 hours a week on average pre-Covid (Class 2*)

- EP1 Rates are $1200 per fortnight (Class 1*) and $750 per fortnight (Class 2*)

- EP2 Rates are $1000 per fortnight (Class 1*) and $650 per fortnight (Class 2*)

- Introduction of ‘Legacy Employers’

*The terms ‘Class 1’ and ‘Class 2’ are illustrative titles only, and are not present in policy or legislation

So, what if you do not meet the drop in turnover provisions for the two extension periods? Firstly, if you do not qualify for Jobkeeper in the extension period windows, do NOT pay your staff the set Jobkeeper rates as they will NOT be reimbursed by the ATO (if you no longer qualify). For those that no longer qualify for Jobkeeper, there are two broad categories, Legacy Employers, and everyone else. Being classed as a Legacy Employe

r gives you certain benefits not offered to everyone else. It will not provide you with cash incentives, but it will allow you Fairwork Concessions, so you are able to work back to full operation.

Classification as a Legacy Employer is only offered to businesses that have previously received a Jobkeeper payment, and allows them to ‘give that employee enabling directions in relation to duties and location of work and can reach agreements with that employee a

round days and times of work’. They can also give a stand-down direction to the employee where they are required to reduce their ordinary hours of work (hours as at 1st March 2020) by up to 40%.

To be an eligible employer, you must qualify for a 10% decline in turnover certificate. These certificates are granted by a registered tax agent, BAS agent or qualified accountant (professional accreditation required). Businesses with less than 15 employees can alternatively make a statutory declaration for their eligibility.

Similarly, to Jobkeeper, there are testing windows and defined points that you must conduct a turnover test. 10% decline in turnover certificates should only be issued for these defined periods.

- Between 28 September 2020 and 27 October 2020 – an employer must satisfy the 10% decline in turnover test for the June 2020 quarter (i.e., compared to the June 2019 quarter).

- Between 28 October 2020 and 27 February 2021 – the employer must satisfy the 10% decline in turnover test for the September 2020 quarter (i.e., compared to the September 2019 quarter).

- On or after 28 February 2021 – an employer must satisfy the 10% decline in turnover test for the December 2020 quarter (i.e., compared to the December 2019 quarter).

Jobkeeper is complicated, and it is only becoming more difficult. Given that it sits alongside employment law, it is a highly risky area, as non-compliance can trigger repercussions from Fairwork, the ATO and anyone in between! Make sure you consult with a reputable tax agent and accountant to lower these risks.

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