On Friday 14 August 2020, the Treasurer released an update on Jobkeeper 1, which is currently in force. This update broadens the eligibility test for the employees, who are otherwise not eligible based on existing criteria. Other basic conditions, such as declining in turnover test, etc. remain the same.
New test date for identifying eligible employees
Prior to this update, an eligible employee for JobKeeper purpose needs to be employed by the entity as at 1 March 2020 and also needs to satisfy other certain conditions.
Under the new rules, 1 July 2020 will be the relevant test date rather than 1 March 2020. Some additional employees might become eligible for JobKeeper payment from 3 August 2020, equivalent to the 10th JobKeeper fortnight (FN10) payment.
Employees who met the conditions as at 1 March 2020 will continue to be eligible if they are still employed by the entity.
What does this mean to your business?
- If your business employs full time or part time employees between 2 March 2020 and 1 July 2020, those employees can potentially be eligible for JobKeeper from 3 August 2020 onward, assuming all other basic conditions being met.
- If you have casual employees who have been employed for more than 12 month between 2 March and 1 July, those employees can potentially be eligible, if they are employed on a regular and systematic basis and meet all other basic conditions.
- If you have employees who failed the age-related conditions or residency conditions as at 1 March 2020, they can potentially be eligible if they met those conditions on 1 July 2020.
Under “one in, all in” principle, employers need to ensure that they identify all additional employees who could be eligible for JobKeeper and provide them with the nomination forms .
What is the deadline for top-up payments?
In simple terms, JobKeeper payment works in the way of reimbursement. An employer must pay at least $1,500 per fortnight to all new eligible employees, including those existing ones, for the fortnights starting on 3 August 2020 and 17 August 2020. However, the ATO will allow the employer to make top-up payments by 31 August 2020.
What happen to a new employee who was previously on JobKeeper payment?
If a new employee previously received JobKeeper either from previous employer or as a business participant, the employee can potentially be an eligible employee again if the individual has ceased to be employed or actively engaged in the business (as a business participant) of the original entity after 1 March 2020 but before 1 July 2020.
What’s in for the employer?
The new rule will potentially bring additional cash support for eligible employers for FN 10,11,12 &13. For each additional new employee, the employer will receive an extra $6,000 in total for four fortnightly payments.
The downside is that the employer will need to have enough cashflow to make the top-up payments first to be eligible.
If your business is impacted by COVID-19, please contact us for assistance. It only takes less than half an hour and could save you thousands.
Contact Beyond Taxation for some help today on 1300 552 993 or email Joy@beyondtaxatin.com.au
General Advice Warning
The information contained in this communication has been provided as general advice only and was prepared while the information was available at the time of writing.