The second extension to JobKeeper payments will come into effect on 4 January 2020 and the JobSeeker COVID supplement will also change in the new year. Here’s what you need to know.
Last updated: 21 December 2020
In July 2020, the Australian Government announced an extension of and changes to the JobKeeper and JobSeeker payments designed to support businesses and individuals through the COVID-19 crisis. The JobKeeper payments were extended in two periods:
- Extension 1: 28 September 2020 to 3 January 2021
- Extension 2: 4 January 2021 to 28 March 2021
With extension 2 starting early in the new year, here is a recap of what to expect if your business is registered for JobKeeper and check your eligibility if you have been receiving payments.
What is happening with JobKeeper Payment?
JobKeeper extension 2 rates
There are two tiers of JobKeeper payment in extension 2, based on the number of hours that an eligible employee works, or that an eligible business participant is actively engaged in the business.
The tier 1 rate of $1,000 per fortnight will apply to eligible employees or business participants who worked or were actively engaged in the business for 80 hours or more.
The tier 2 rate of $650 per fortnight applies to any other eligible employees and business participants.
If you are receiving the payments, you must ensure that your eligible tier 1 and 2 employees are paid at least these amounts.
In order to claim JobKeeper payments for the second extension period, you will need to show that your actual GST turnover declined in the December 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019). The ATO provides two methods of demonstrating your decline in turnover. If there were events or circumstances outside the usual business setting that resulted in the December 2019 comparison period not being appropriate, then an alternative test may apply.
For JobKeeper extension 2, you use your current GST turnover rather than your projected GST turnover for the relevant quarter being tested, using the accounting method (cash or non-cash) that you use for GST reporting.
Businesses will need to demonstrate a 30 per cent reduction in GST turnover in the December quarter, relative to a comparable period to remain eligible for extension 2 payments through to March.
You must notify the ATO of your eligible employees at each payment rate, and tell your eligible employees which payment rate applies to them within seven days of notifying the ATO.
Note that JobKeeper payments are made to you in arrears. You must have made payments to your employees (met the wage condition) to be reimbursed. .
Visit the ATO website to find out more about the eligibility requirements for the JobKeeper extension 2 period.
You can enrol in JobKeeper at any time until the program closes.
WA industrial relations JobKeeper provisions
The WA Government has extended the COVID-19 JobKeeper provisions until 28 March 2021. These provisions apply to businesses that operate under the state industrial relations system (which applies to sole traders, unincorporated partnerships and some trusts).
As part of the provisions you can:
- issue a ‘JobKeeper enabling direction’ to temporarily change or reduce an employee’s working hours (which may be reduced to nil), change an employee’s duties and change their location of work
- request an employee change their days/times of work.
The JobSeeker COVID supplement payment will continue until the end of March 2021. The supplement rate of $550 per fortnight will be reduced to $250 in October 2020 and $150 in January 2021. This will make the JobSeeker rate approximately $715 per fortnight between January and March 2021 for a single person with no children.
People on this payment will be able to earn $300 a fortnight without reducing their payment. Services Australia has published the JobSeeker rates for people in various circumstances.
Mutual obligation requirements for JobSeeker payments restarted in August 2020 and an asset test commenced from 25 September. The eased eligibility requirements for sole traders to access JobSeeker payments remain in place.
From 1 April 2021, payments will revert to the normal JobSeeker rate for a recipient’s individual circumstances.