JobKeeper 2.0 Extension Period 2 commences from January 4 2021 and clients are reminded of the need to again apply the decline in turnover test. To be eligible for the JobKeeper payment for Extension Period 2, from 4 January until 28 March 2021, businesses and not-for-profits will be required to demonstrate an ongoing decline in turnover and reassess their eligibility with reference to their actual GST turnover in the December 2020 quarter relative to the December 2019 quarter.
Importantly, if the business is registered for GST, the manner in which sales are allocated to the relevant quarter must be done consistently with how sales are reported for BAS purposes. Businesses using a cash basis for reporting GST, for example, must use a cash basis for providing evidence of a decline in turnover. Please note that alternative tests for determining a decline in turnover may be available in some circumstances and you can discuss these possible alternatives with your accountant.
To be eligible for the JobKeeper payment Extension Period 2, businesses and not-for-profits need to demonstrate a decline in turnover in the December quarter (or other comparison period if an alternative test applies) of at least:
- 50 per cent for those with an aggregated turnover of more than $1 billion;
- 30 per cent for those with an aggregated turnover of $1 billion or less;
- 15 per cent for Australian Charities and Not-for Profits Commission registered charities (excluding schools and universities).
Eligibility for the second extension period is available to new recipients and also those who have previously been in receipt of the payment, either JobKeeper 1.0 and/or JobKeeper 2.0 during Extension Period 1.
Please also note the current JobKeeper payment rates will reduce in Extension Period 2 and from 4 January 2020, the applicable rates will be:
- $1,000 per fortnight for all eligible employees who, in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, worked in the business or not-for-profit for 80 hours or more, and for business participants who were actively engaged in the business for 80 hours or more in the month of February 2020, and
- $650 per fortnight for other eligible employees and business participants.
The JobKeeper payment will continue to be made by the ATO to employers in arrears and employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper payment, based on the payment rate that applies to each employee. This is referred to as the wage condition.
ATO Extends JobKeeper Deadlines Ahead of Christmas
The JobKeeper deadlines for the second extension period have now been extended by the ATO ahead of the festive season. Completion of the December business monthly declaration, for employers to be reimbursed for payments between 23 November 2020 and 3 January 2021, has also been extended from the usual 14th of each month to 28 January 2021.
To account for the New Year weekend, the Tax Office will also allow employers to meet the wage condition for payments between 21 December and 3 January 2021 by 4 January 2021.
For clients to apply the decline in turnover test, the ATO has announced it will make the new decline in turnover form available on its systems from 4 January. To be eligible for JobKeeper payments from the beginning of the second extension period, the decline in turnover form will need to be submitted by all participants by 31 January. Employers will also be given until 31 January to meet the wage condition for fortnights starting on 4 January and 18 January 2021.
As we prepare to meet JobKeeper deadlines in the coming weeks, we encourage clients to ensure their record keeping is up to date, to allow timely assessments of JobKeeper eligibility for the second extension period.
Please contact our office if further assistance is required for the approaching JobKeeper extension period. We also remind clients of our office closure from 12pm on December 23rd, until Monday January 11.