JobKeeper 2.0 takes effect; what does it mean for industry?

A number of changes to JobKeeper have taken effect as of this week, including reduced payment rates and a tiered system in lieu of a flat rate.

Businesses now only need to demonstrate the effect of COVID-19 on their revenue in the period of three months before the relevant extension period (rather than for two consecutive quarters before the relevant extension period).

From 28 September, businesses will no longer be able to test for eligibility using projected or estimated GST turnovers or to choose a calendar month as a test period.

Instead, to be eligible for JobKeeper payments under the extension, businesses will need to demonstrate they have experienced a decline in turnover of:

  • 50 per cent for those with an aggregated turnover of more than $1 billion; and
  • 30 per cent for those with an aggregated turnover of $1 billion or less

To continue receiving JobKeeper, businesses will also need to show their actual GST turnover has fallen during:

  • Extension period 1: in the period July to September 2020
  • Extension period 2: in the period October to December 2020.

Therefore, a business could be ineligible for Extension period 1 but eligible for Extension period 2.

The Real Media Collective (TRMC) general manager of IR, policy and governance Charles Watson said even though the scheme comes with narrowed eligibility requirements, it is a critical component of support that the industry requires.

“The JobKeeper scheme was part of the Federal Government’s response to keeping workers employed, particularly if their employer’s business had suffered significant impact and downturn as a result of COVID-19,” he told Sprinter.

“The scheme has assisted thousands of businesses and their workers, including many within our industry. However, as the original end date to the scheme was approaching, there was the strongest of cases for its extension.

“TRMC advocated and informed government on our industry’s experiences and the compelling need for an extension of the scheme as well as related workplace flexibilities. Six months on and we were not all in the same place on a national basis.”

Watson mentioned that this is in part due to general business conditions and consumer confidence, geographical related issues such as those being experienced in Victoria, and the variable levels of improvement for certain client sectors of the industry.

“TRMC greeted the extension of the scheme, although JobKeeper 2.0 did come with narrowed eligibility requirements, altered reporting requirements, and decreasing payments than was in the original scheme,” he said.

“The extension has come with a phasing out and tiered payment approach which reduces the entitlements in the final quarter of this year and again in the first quarter of 2021.”

The JobKeeper 2.0 tiered system is as follows:

Phase 1 extension: 28 September 2020 to 3 January 2021

Tier 1: $1,200 per fortnight – from 28 September 2020 to 3 January 2021, the payment rate will be reduced from $1,500 to $1,200 per fortnight for all eligible employees who, in the four weeks before 1 March 2020 were working in the business for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for more than 20 hours per week on average in the month of February 2020; and

Tier 2: $750 per fortnight – for employees who were working in the business 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 4 weeks before 1 March 2020.

Phase 2 extension – 4 January 2021 to 28 March 2021

Tier 1: $1,000 per fortnight – from 4 January 2021 to 28 March 2021, the payment rate will be $1,000 per fortnight for all eligible employees who in the 4 weeks before 1 March 2020, were working for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for more than 20 hours per week on average in the month of February 2020; and

Tier 2: $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 4 weeks before 1 March 2020.

“Although some states and regions have experienced a return towards normal operations, the extension of the JobKeeper scheme is an acknowledgement by the government of what I have been referring to as “same storm, different boats,” Watson said.

“The scheme has served an important purpose for businesses and employees and the extension remains a critical component of the ongoing support needed by many businesses to hold their heads above water for the remainder of this year.”

In addition, reporting for eligible employees and businesses have changed. According to the ATO, the business or registered tax or BAS agent will need to submit a monthly declaration to the ATO between the 1st and the 14th of each month to receive reimbursements for payments made in the previous month; and the business will need to select which payment tier they are claiming for each eligible employee by the first monthly business declaration in November.

“In support of the JobKeeper extension, government has also extended workplace flexibilities within the Fair Work Act and industry Awards,” Watson mentioned.

“JobKeeper enabling directions remain available to businesses who continue to be recipients of the scheme as well as ‘legacy’ employees, and also those employers whose businesses no longer qualify for JobKeeper but are still experiencing a 10 per cent decline in turnover. Those flexible workplace practices will certainly be needed by businesses into 2021.”

 

 

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One thought on “JobKeeper 2.0 takes effect; what does it mean for industry?

  1. Excellent summary. The Real Media Collective (TRMC) is fast becoming the voice and support for the printing and related industries.

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