JobKeeper Version 2.0. Everything you need to know.
The good news for small, medium and micro-sized businesses is that the Federal Government has announced an extension of JobKeeper for another six months, to March 2021.
Here’s what you need to know.
By ATB Partners
The first thing to understand is that the existing JobKeeper arrangement will stay in place, as is, until 27 September 2020. So, if you are currently receiving this payment for your employees, nothing changes right now, simply keep reporting to the ATO as specified.
But – if you’re in a panic about the stipend coming to an end, then it’s worthwhile looking at the criteria for the new version of JobKeeper, let’s call it version 2.0, which will kick in from September 28.
JobKeeper Version 2.0
In a nutshell, JobKeeper 2.0 will be targeted specifically at those businesses and non-profit organisations which continue to be affected by Covid-19. Payment rates will be reduced, and two tiers of payments will be put in place.
The tiered system is designed to provide continued financial support, but over time, wean businesses off JobKeeper, rather than cut them dry come March.
In the first ‘tier’, from 28 September 2020 to 3 January 2021, the payment rate will be $1,200 per fortnight for all eligible employees who, in the four weeks before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average and for business participants who were actively engaged in the business for more than 20 hours per week.
The payment rate will be $750 per fortnight for employees who were working in the business or not-for-profit for less than 20 hours a week on average and business participants who were actively engaged in the business less than 20 hours per week in the same period.
From 4 January 2021 to 28 March 2021, the second ‘tier’ will be put into place. The payment rate will be reduced further to $1,000 per fortnight for all eligible employees who in the four weeks before 1 March 2020, were working for 20 hours or more a week on average and for business participants who were actively engaged in the business for more than 20 hours per week.
It will be reduced to $650 per fortnight for employees who were working for less than 20 hours a week on average and business participants who were actively engaged in the business for less than 20 hours per week in the same period.
Is your business eligible?
This is the question many businesses are asking, and it comes down to turnover, and being able to prove to the ATO that your business has suffered a relevant and continuing decline in turnover in both the June and September quarters of this year. There’s more detailed information about the eligibility criteria on the Treasury website.
However, the assessment doesn’t end there. To ensure continued eligibility for the payment, businesses and not-for-profits will need to further reassess their eligibility in January 2021 for the period from 4 January to 28 March 2021.
What should businesses do right now?
Essentially, if you’re going to be reliant on continued JobKeeper support, you need to reapply come September 28, because assessment will be based on actual turnover, it’s critical that your business has up-to-date financial records, and that you file your tax return on time.
It also means that while you may be able to access the payment for another few months, you should really be looking forward to the time when JobKeeper will no longer be available, and making strategic financial plans.
These are not easy times, and business confidence and the local and global economies are still only showing slight signs of recovery.
So, it’s wise to get some professional advice. If you need our help understanding what to do next about Job Keeper, or even the other new Federal Government initiatives such as Job Trainer and Job Maker, make an appointment with us.
Don’t forget that we also offer business strategy advice, as well as business mentoring, accounting, taxation and financial planning services. And there’s a wealth of information on our website including our free 5-step process e-book developed specifically for small business, to help you take control.
At ATB Partners, we’re here to help. We’re incredibly passionate about small business and want to help as many operators as possible not only survive the pandemic, but eventually thrive. We assisted hundreds of businesses successfully navigate the GFC and we can help you too.
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