The Federal Government announced in September an extension to its COVID-19 JobKeeper relief package until 28 March 2021.
The extension comes in 2 stages, and has different requirements for businesses compared to the JobKeeper 1.0 model. So what does this mean for you?
What has changed?
The JobKeeper 2.0 program implements a staggered decline in support for businesses, as the economy slowly recovers. The Federal Government is offering continued support for businesses recovering from the pandemic, but slowly cutting back the level of help.
Under the new scheme, the Federal Government has classified employees into different categories which impacts upon the amount of subsidy that a business can receive.
Employees are now classified into two tiers based on the hours that they work. Those tiers are:
- Tier 1 Employees: works 80 or more hours over a 28-day cycle.
- Tier 2 Employees: works less than 80 hours over a 28-day cycle.
Depending on the employee’s tier, the amount of subsidy that a business is eligible for changes.
Additionally, the assessment method for determining whether a business is eligible has also changed. Now, businesses will need to show a reduction in turnover of more than 30% using either the basic test method (based on GST turnover) or the alternative test method (which should only be used in specific circumstances).
The primary and most common method, being the basic test method, assesses a business’ turnover based on sales and turnover, not projected sales (as previously allowed). A business when determining eligibility should seek specific financial advice from their accountant or tax agent.
JobKeeper 2.0: Stage 1 – from 28 September 2020 to 3 January 2021
Under the Stage 1 JobKeeper 2.0 program, the amount for eligible employees decreases to:
- Tier 1: $1,200 per fortnight (before tax).
- Tier 2: $750 per fortnight (before tax).
JobKeeper 2.0: Stage 2 – from 4 January 2021 to 28 March 2021
Stage 2 is a further reduction to the JobKeeper stimulus to:
- Tier 1: $1,000 per fortnight (before tax).
- Tier 2: $650 per fortnight (before tax).
What does this mean for you?
If you require advice regarding how JobKeeper 2.0 potentially applies to your business, please contact Aaran Johnson on email@example.com or Simon Kumar on firstname.lastname@example.org or by phoning 02 4626 5077 to discuss.
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.