JobKeeper Extension Rules made – hours test changed to 80 hours per 28 days
On 15 September 2020 the Federal Treasurer Josh Frydenberg released the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020 (and Explanatory Statement).
These “extended JobKeeper” Amendment Rules are broadly in line with the Federal Government’s original announcements, in particular, extending the JobKeeper scheme to 28 March 2021 and introducing a two-tiered reduced fortnightly JobKeeper payment based on the number of hours worked.
However, there has been one important change. The test for hours worked (including paid leave and public holiday leave) is now 80 hours per 28 day reference pay period ending before 1 March or 1 July 2020 for employees or 80 hours of active engagement for business participants for February 2020. If February is not an appropriate month to measure, the Commissioner can allow for a different month.
Treasury has confirmed in the Explanatory Statement that employers can qualify for JobKeeper2.0 even if they were not eligible for JobKeeper1.0 so long as they meet the new extended quarterly turnover decline tests for the September and December 2020 quarters.
To qualify for JobKeeper payments for fortnights commencing on or after 28 September 2020, entities must notify the Commissioner in the approved form about whether the higher or lower rate applies to the business participant. Business participants and entities must be in a position to reasonably demonstrate the basis on which they determined that a business participant was actively engaged in the business for the required number of hours.
Entities must notify individuals in writing within seven days of advising the Commissioner of the JobKeeper payment rate that applies to the individual.
The Commissioner of Tax has subsequently released a series of legislative instruments and explanatory statements to support these Rules. These instruments include aligning the turnover testing for JobKeeper with GST rules, setting conditions for alternative reference periods under the 80 hour test and setting out concessions for the Commissioner to accept that the higher JobKeeper rate applies where the 80 hours worked may not otherwise be readily ascertainable.
Treasury has not yet released the Alternative Test rules which may be critical to a number of employers seeking to qualify for the JobKeeper extension.
Entities who wish to receive the extended JobKeeper payments must also keep up to date with the ATO’s published guidance as to the various extended JobKeeper reporting deadlines.
Interestingly, the ABS released labour force figures for August, with a 0.7 drop in unemployment to 6.8% while underemployment remains steady at 11.2%. Victoria was the only State with a decline in hours worked with an unemployment rate of 7.1%. This is sure to feature in the Government’s rhetoric that JobKeeper is targeted and temporary as we move closer to JobKeeper 2.0 on 28 September.
