UPDATED 4/9/2020

The shape of the JobKeeper extension is now clear as the parliament passed the bills bringing Stage 2 and Stage 3 (which are being called by various names) overnight. In addition the companion bill has extended the JobKeeper Flexibility Provisions (to give Directions) to those businesses who are transitioning away from JobKeeper come Stage 2, but who are not yet at ‘recovered’. This extension of flexibility is a welcome recognition of the fact that businesses are not out of the woods yet, but it comes with curtailed options and steep penalties for inappropriate use.

The treasury rules and the ATO documents and processes are likely to be tweaked over the coming days and weeks, and this article will be updated with the most up to date information and noted here with the update date.

Changes of Changes

In the face of an ever evolving situation, the recently announced extension and modification of the JobKeeper program has now gone through another significant change, in recognition of the changing and continued pressures that businesses are facing.

In early August JobKeeper was extended to 28/3/2021.  However, there was to be changed turnover tests and reduced payments, as well as a proportionate payment for those staff who worked less than 20 hours.  This extension and change has been referred to as JobKeeper 2.0 or Stage 2.  The most recent announcements have again rewritten what will happen to JobKeeper after Stage 1 ends on 27/9/2020.  The result is that we are now looking at JobKeeper Stage 2 and JobKeeper Stage 3. 

The changes that were announced have the effect of creating three distinct Stages of JobKeeper, each with its own turnover test for business eligibility.  One of the key differences in the most recent announcement (when compared to the extension announced a fortnight ago), is that qualification for JobKeeper Stage 2 will now be based on actual performance in the 2020 September quarter (i.e.July, August and September) compared against the same quarter last year. 

This change reflects the calls made by industry, including ACAPMA, that the original plan for Stage 2 (which required businesses to show a requisite revenue drop in both the June 2020 and September 2020 quarters) failed to take into account the fact that some businesses have a short burst of support and activity as the initial lockdowns were eased, but that they are again suffering as part of the second wave.

The other key difference in the announcements from earlier this month and given life in the updated treasury rules was the Employee Eligibility Test Date has changed from 1 March 2020 to 1 July 2020 – including for the remainder of JobKeeper through to 30 September 2020.  This means that some staff that were not eligible on 1/3/2020, are now eligible for JobKeeper.  This includes casuals who have achieved 12 months service by 1/7/2020, staff who have achieved permanent residency by 1/7/2020, staff who have turned 18y by 1/7/2020 and permanent staff employed between 2/3/2020 and 1/7/2020. 

Continued (but curtailed) Flexibility for businesses transitioning away from JobKeeper

The final shape of the Stage 2 and 3 changes have addressed the other lurking issue of the JobKeeper Flexibility Provisions, which will now be made available (albeit in a limited fashion) to businesses that were eligible for JobKeeper Stage 1, but due to a partial recovery, are not eligible for Stage 2. Those businesses who meet this criteria and can demonstrate at least a 10% drop in turnover (certified by a registered professional) will be able to access modified versions of the JobKeeper Flexibility Provisions, including the ability to standdown up to 60% of hours (meeting minimums) and direct appropriate changes to location and work tasks.

These provisions are curtailed, and will come with a higher standard of consultation required and significant penalties for accessing the provisions inappropriately.

ACAPMA advises that members who are; currently using the JobKeeper Flexibility Provisions in Stage 1, but believe they will not qualify for Stage 2, but will have at least a 10% drop AND need to continue to access Flexibility in some form, are encouraged to reach out for to explore their specific situation via employment@acpama.com.au and to see; https://acapmag.com.au/2020/09/jobkeeper-stage-2-3-directions-and-flexibility-options-changed-and-extended/ for more information on the Flexibility Provisions for Stage 2 and 3 for Legacy Businesses.

What you need to know

Below is a short summary of the operation of the rest of JobKeeper Stage 1 (31/3/2020-27/9/2020), JobKeeper Stage 2 (28/9/2020-3/1/2021) and JobKeeper Stage 3 (4/1/2021-28/3/2021).  This is followed by a Q&A on JobKeeper that puts these changes into a practical context.  A Quick Guide to the changes has also been included as a table below, it is noted that this can be difficult to see on some devices so a PDF link to the Table has also been provided, as well as links to more information and where to go for help.

JobKeeper STAGE 1 – 31/3/2020-28/9/2020

The change in the Employee Eligibility Test Date has the effect of creating two Employee Eligibility Test Dates; the original date of 1/3/2020 and the secondary date of 1/7/2020. A business will be able to claim the JobKeeper Subsidy if the employee meets all of the eligibility criteria on either the original date of 1/3/2020 (current JobKeeper Staff) or the secondary date of 1/7/2020 (new to JobKeeper Staff). If the employee was not eligible on the original date, but is eligible on the secondary date, then the business can claim JobKeeper for them from 3/8/2020, and will be required to ensure that the Wage Condition for STAGE 1 of $1,500 before tax per fortnight as a minimum, is paid to the employee from 3/8/2020.

The ATO has released the updated Employee Nomination Form to reflect the secondary date https://www.ato.gov.au/forms/jobkeeper-payment—employee-nomination-notice/.

One-In-All-In reminder – the requirement for participation in the JobKeeper program has not changed…if the business is participating ALL eligible staff must be asked to nominate or refuse, and if they nomintate they MUST be included in the scheme. They must be paid the minimum wage condition and thier eligibility communicated to the ATO.

JobKeeper STAGE 2 – 28/9/2020 – 3/1/2021

Employee Eligibility Test Date:  1/7/2020
Business Turnover Test (standard):  30% reduction in Turnover for July-September 2020 vs July-September 2019 (unless annual turnover higher than $1B then a 50% reduction is needed to qualify, or if the business is a Not for Profit or Charity then a simple 15% reduction is needed to qualify).  Test only to be conducted once, and the business remains eligible until the end of the STAGE
Wage Condition:  Staff will need to be assessed in 2 categories, resulting in 4 groups;

  • Staff who are Recipients of JobKeeper Stage 1 with the original Employee Eligibility Test Date of 1/3/2020, and who are now getting JobKeeper Stage 2;
    – Worked more than 20 hours per week in the 4 weeks before 1/3/2020, must be paid by the participating business, the Wage Condition of at least $1,200 before tax per fortnight.*
    – Worked less than 20 hours per week in the 4 weeks before 1/3/2020 – must be paid by the participating business, the Wage Condition of at least $650 before tax per fortnight.*
  • Staff who are Recipients of JobKeeper Stage 2, with the secondary Employee Eligibility Test Date of 1/7/2020 (so those added to Stage 1 after 3/8/2020);
    – Worked more than 20 hours per week in the 4 weeks before 1/7/2020, must be paid by the participating business, the Wage Condition of at least $1,200 before tax per fortnight.**
    – Worked less than 20 hours per week in the 4 weeks before 1/7/2020 – must be paid by the participating business, the Wage Condition of at least $650 before tax per fortnight.**

*the ATO can set a different test if the 4 weeks before 1/3/2020 were unusual for the employee (for example, due to bushfires)

** the ATO can set a different test if the 4 weeks before 1/7/2020 were unusual for the employee (for example, due to the lockdown restrictions being reintroduced in Victoria/New South Wales, or due to Border Restrictions impacting trade)

JOBKEEPER Q&A WITH ACAPMA

Business Eligibility?

My business was not eligible for JobKeeper Stage 1, can I get JobKeeper Stage 2?

If the business meets the turnover test for the September 2020 quarter, then you will be able to access JobKeeper Stage 2, even if you did not qualify for JobKeeper Stage 1.

Is my business eligible for JobKeeper Stage 2?

The business will have to be able to demonstrate that it had a decline in turnover for the September 2020 quarter (July, August and September), when compared to the same period in 2019, in the amount of 30% if the business has an annual turnover of less than $1B or in the amount of 50% if the business has an annual turnover of more than $1B.  Not for profit and Charities have a lower threshold of a 15% reduction.

For businesses that have been receiving JobKeeper Stage 1 it is important to note that even if your actual turnover in the April, May and June period does not meet the level of reduction required you will still be eligible to continue to receive your Stage 1 payments until the end of September, and if your July, August and September periods do actually meet the reduction required then you will be eligible for the JobKeeper Stage 2 Payments, even if your business performed well in the April-June period.

The ATO can set an alternative test for those businesses that had unusual comparison periods (eg August 2019 was unusual for some reason).

New Permanent Employee?

I have hired a new permanent employee since 2/3/2020, are they now eligible for the rest of JobKeeper Stage 1 and for JobKeeper Stage 2?

Yes, they will be eligible (as long as they meet the other criteria, and your business meets the turnover test criteria) to receive the JobKeeper Stage 1 and later Stage 2 payments.  The amount of the subsidy that the business will receive, and thus the minimum Wage Condition that the business must pass onto the employee will depend on which Stage. For Stage 1 the Wage Condition is a minimum of $1,500 before tax per fortnight. For Stage 2 the amount is variable and will depend the number of hours they work in the 4 weeks before 1/7/2020 (see below).

New Casual Employee?

I have hired a new casual employee since 2/3/2020, are they now eligible for the rest of JobKeeper Stage 1 and JobKeeper Stage 2?

No, new casual hires will not be eligible as they will not meet the criteria of having served at least 12 months with the business.

Casual ticked over to 12 months?

One of my staff was not eligible for JobKeeper Stage 1 because they were a casual and they had only been working for me for 11 months, are they now eligible for the rest of JobKeeper Stage 1 and JobKeeper Stage 2?

Yes, they will be eligible (as long as they meet the other criteria, and your business meets the turnover test criteria) to receive the JobKeeper Stage 1 and later 2 payments.  The amount of the subsidy that the business will receive, and thus the minimum Wage Condition that the business must pass onto the employee will depend on the Stage. Stage 1 the Wage Condition is a minimum of $1,500 before tax per fortnight. Stage 2 the Wage Condition is variable depending on the number of hours they work in the 4 weeks before 1/7/2020 (see below).

Employee achieved Permanent Residency?

One of my staff was not eligible for JobKeeper Stage 1 because they were not a permanent resident, but they have since become a permanent resident, are they now eligible for the rest of JobKeeper Stage 1 and JobKeeper Stage 2?

Yes, they will be eligible (as long as they meet the other criteria, and your business meets the turnover test criteria) to receive the JobKeeper Stage1 and 2 payments.  The amount of the subsidy that the business will receive, and thus the minimum Wage Condition that the business must pass onto the employee will depend on the Stage. Stage 1 the Wage Condition is a minimum of $1,500 before tax per fortnight. Stage 1 the Wage Condition is variable and depends on the number of hours they work in the 4 weeks before 1/7/2020 (see below).

Employee Eligibility?

What does a ‘New to JobKeeper’ staff member need to be to be eligible for the rest of JobKeeper 1 and JobKeeper Stage 2 Payments?

An employee is eligible to receive the JobKeeper Stage 2 Payment if they tick ALL of the following boxes;

  • Were a full time, part time or fixed term employee as at 1/7/2020, OR, Were a long term casual employee with at least 12 months service with the business as at 1/7/2020, AND
  • Were aged 18y or over as at 1/7/2020, (or were 16/17y and financially independent and not undertaking full time study), AND
  • Were an Australian Resident (as per Social Security Act 1991), OR, Were an Australian Resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category VISA as at 1/3/2020, AND
  • Were not receiving Government Parental Leave or Dad and Partner Pay under the Paid Parental Leave Act 2010, or a Workers Compensation Payment for Total Incapacity at the time of claiming the employee (this will roll forward for all JobKeeper Periods until the scheme ends – so the receipt of one of these payments in a JobKeeper Period makes the employee ineligible for that particular Period), AND
  • Is not receiving JobKeeper Payments from another employer

JOBKEEPER STAGE QUICK REFERENCE TABLE

Note: If this is difficult to see/navigate on your device please see the PDF version here;  https://acapmag.com.au/wp-content/uploads/2020/08/ACAPMA-JobKeeper-STAGE-1-2-3-QRG-Table.pdf

 JobKeeper STAGE 1  JobKeeper STAGE 2  JobKeeper STAGE 3  
Total Stage Period:31/3/2020-27/9/2020  28/9/2020 – 3/1/2021  4/1/2021-28/3/2021  
Employee Eligibility Test Date:   1/3/2020* *from 3/8/2020 will change to 1/7/2020  1/7/2020  1/7/2020  
Business Turnover Test (standard):   30%* reduction in Turnover for; March 2020 vs March 2019 OR predicted 30% reduction in Turnover for April-June 2020 vs April-Jun 2019   *unless annual turnover higher than $1B then a 50% reduction is needed to qualify, or if the business is a Not for Profit or Charity then a simple 15% reduction is needed to qualify.  30%* reduction in Turnover for; July-September 2020 vs July-September 2019     *unless annual turnover higher than $1B then a 50% reduction is needed to qualify, or if the business is a Not for Profit or Charity then a simple 15% reduction is needed to qualify.   30%* reduction in Turnover for;  October-December 2020 vs October-December 2019     *unless annual turnover higher than $1B then a 50% reduction is needed to qualify, or if the business is a Not for Profit or Charity then a simple 15% reduction is needed to qualify. 
Wage Condition:   All eligible staff must be paid by the participating business, the Wage Condition of at least $1,500 before tax per fortnight  Staff will need to be assessed in 2 categories, resulting in 4 groups;   Staff who are Recipients of JobKeeper Stage 1, and who are now getting JobKeeper Stage 2;Worked more than 20 hours per week in the 4 weeks before 1/3/2020 – must be paid by the participating business, the Wage Condition of at least $1,200 before tax per fortnight.*Worked less than 20 hours per week in the 4 weeks before 1/3/2020 – must be paid by the participating business, the Wage Condition of at least $650 before tax per fortnight.*   Staff who are new Recipients of JobKeeper Stage 2 (never got Stage 1)Worked more than 20 hours per week in the 4 weeks before 1/7/2020 – must be paid by the participating business, the Wage Condition of at least $1,200 before tax per fortnight.**Worked less than 20 hours per week in the 4 weeks before 1/7/2020 – must be paid by the participating business, the Wage Condition of at least $650 before tax per fortnight.**   *the ATO can set a different test if the 4 weeks before 1/3/2020 were unusual for the employee (for example, due to bushfires)   ** the ATO can set a different test if the 4 weeks before 1/7/2020 were unusual for the employee (for example, due to the lockdown restrictions being reintroduced in Victoria/New South Wales, or due to Border Restrictions impacting trade)  Staff will need to be assessed in 2 categories, resulting in 4 groups;   Staff who are Recipients of JobKeeper Stage 1, and who are now getting JobKeeper Stage 2;Worked more than 20 hours per week in the 4 weeks before 1/3/2020 – must be paid by the participating business, the Wage Condition of at least $1,200 before tax per fortnight.*Worked less than 20 hours per week in the 4 weeks before 1/3/2020 – must be paid by the participating business, the Wage Condition of at least $650 before tax per fortnight.*   Staff who are new Recipients of JobKeeper Stage 2 (never got Stage 1)Worked more than 20 hours per week in the 4 weeks before 1/7/2020 – must be paid by the participating business, the Wage Condition of at least $1,200 before tax per fortnight.**Worked less than 20 hours per week in the 4 weeks before 1/7/2020 – must be paid by the participating business, the Wage Condition of at least $650 before tax per fortnight.**   *the ATO can set a different test if the 4 weeks before 1/3/2020 were unusual for the employee (for example, due to bushfires)   ** the ATO can set a different test if the 4 weeks before 1/7/2020 were unusual for the employee (for example, due to the lockdown restrictions being reintroduced in Victoria/New South Wales, or due to Border Restrictions impacting trade)
Payment from ATO:   Monthly in arrears to the business  Monthly in arrears to the business  Monthly in arrears to the business  
Reporting to the ATO:   Monthly  Monthly  Monthly  
As at 12:39 7/8/2020 – see; https://treasury.gov.au/coronavirus/jobkeeper for more information

MORE INFORMATION

For more information see; https://treasury.gov.au/coronavirus/jobkeeper

HERE TO HELP

As always ACAPMA is engaged with the government and regulators as this program rolls out, and we are here to provide advice and support to members.  If you have questions please email employment@acapma.com.au

Elisha Radwanowski BCom(HRM&IR)

ACAPMA