Prompted by the economic impact of the shutdowns in Victoria, the government has revised the second phase of the JobKeeper program announced a couple of weeks ago and adjusted employee eligibility. The second phase of the Jobkeeper program was outlined in our email to you on 22 July 2020. The revamp is estimated to add a further $15 billion to the cost of the program.
The current JobKeeper program will still continue until its completion on 27 September. It will remain unchanged, apart from the reference date for assessing employee eligibility as outlined below.
The extension is still for an additional six-months, from 28 September 2020 to 28 March 2021, divided into two periods; the 1st extension period of seven fortnights, and the 2nd extension period of six fortnights. The turnover decline thresholds also remain. For simplicity, we will refer to the 30% threshold
Employers will now re-test their eligibility to participate in the scheme as follows
Previously, employers were required to test the June and September 2020 quarters for the period 28 September 2020 to 4 January 2021, and the June, September and December 2020 quarters for the period 4 January 2021 to 28 March 2021.
For the current fortnight (commenced 3 August) onwards, the eligible employee test will also be modified. This test will now require that the employee was employed on 1 July 2020 rather than 1 March 2020.
This will expand the scheme to include employees who have been employed during the period 1 March 2020 to 1 July 2020. But note, an employee is not eligible if they have previously nominated with another employer (even though no longer employed with the previous employer, so there is no double-dipping). This might not be the intention, and these issues will need clarification.
The two payment rates which will apply in the second phase of the JobKeeper program will remain, but the higher rate will apply where an eligible employee worked an average of 20 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020.
Businesses and advisers are cautioned the proposed changes announced by the Treasury will not come into effect until such time legislation is passed by Parliament, or a legislative instrument is registered and as such, may be subject to further change.
For further information please contact your Armada Advisor.