JobKeeper 2.0 25 September 2020 - Michael Croker CA Australian Tax Leader Chartered Accountants Australia and New Zealand
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JobKeeper 2.0
25 September 2020
Michael Croker CA
Australian Tax Leader
Chartered Accountants Australia and New Zealand
ABS Single Touch Payroll data indicates that between the week
ending 14 March 2020 (the week Australia recorded its 100th
COVID-19 case) and the week ending 5 September 2020:
Labour Force statistics, 17 September 2020 (ABS)
• Payroll jobs decreased by 4.5%
• Total wages decreased by 4.3%
JobKeeper one of many issues to discuss…
Insolvency
Asset protection, personal plans
• “Temporary” COVID-19 safe
harbour measures extended to 31
Balance sheet management
December 2020 + 2021 new
insolvency rules for
The JobKeeper (JK) scheme – v1.0 + v2.0
Wages JobKeeper
Eligible $ eligible
Unemployed employee
Employer
or JobKeeper
JobSeeker subsidy
$
Eligible
Business
Participant
JobKeeper administration:
“Directions” to employees: JobKeeper 1. Data in: Single Touch
1. Current JK employers Legislation Payroll or online
2. Legacy JK employers (authorises 2. JK paid in arrears
(certified 10% turnover Legislative 3. Integrity Unit follow-up
decline – CAs, agents role) Instruments) 4. Data out: JK data is shared
Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Enabling legislation – Empowers Treasurer to make Rules) Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 (Fair Work JobKeeper directions) – Extended for JK 2.0 and made available to “legacy employers” Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (JobKeeper Rules – Start date, entitlement, amount, timing, administration) – Now amended! Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020 (Alternative Test for JobKeeper) – JK 2.0 updated (see below) Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 2) 2020 (Service entity etc) Superannuation Guarantee (Administration) Amendment (JobKeeper Payment) Regulations 2020 (Super Guarantee Rules) Tax Agent Services (Specified BAS Services No.1) Instrument 2020 (allows registered BAS agents to provide JobKeeper services) Coronavirus Economic Response Package Amendment (Payments and Benefits) Amendment Rules (No. 1) 2020 (banks can get ATO confirmation of entity’s JK participation)
Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules
(No. 5) 2020 and Child Care Subsidy Amendment (Coronavirus Response Measures No. 4)
Minister's Rules 2020 (No JobKeeper for childcare sector employees or EBPS whose
ordinary duties relate principally to the operation of child care services, JK fortnight starting
20 July 2020)
Find out about this and other changes impacting the child care sector on
the Department of Education, Skills and Employment web page
Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules
(No. 6) 2020 (ATO can share JK information with other government agencies)
LCR 2020/1: Decline in Turnover Test - GST Turnover PCG 2020/4: Schemes in relation to the JobKeeper payment PS LA 2020/1: Commissioner's discretion to allow further time for an entity to register for an ABN or provide notice to the Commissioner of assessable income or supplies (amended 16 September 2020 – more examples added: see history) JobKeeper payment - Guide to the modified decline in turnover test Draft: TD 2020/D1: Income tax: notional deductions for research and development activities subsidised by JobKeeper payments • Read CA ANZ’s submission on this draft
Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 7) 2020 (for JK fortnights beginning on or after 3 August 2020, the reference date for determining some employee eligibility conditions changes to 1 July 2020 – Limited re-nomination opportunity for employees) • Amends the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (but we need a consolidated version!) Coronavirus Economic Response Package (JobKeeper Payments) Amendment Act 2020 • Extends the JK time limit in the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 to 28 March 2021, • Amends secrecy rules to allow JK disclosures to government agencies, and • Extends operation of the temporary JobKeeper provisions in Part 6-4C of the Fair Work Act until 28 March 2021 (creating two categories of employers who can access the provisions, i.e. “qualifying employers” who are eligible for JK after 28 September 2020 and “legacy employers” who received JK payments in the period prior to 28 September 2020, but no longer qualify)
Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020 (Main source of JK 2.0 legislative rules) Coronavirus Economic Response Package (Payments and Benefits) (Timing of Supplies Made and Decline in Turnover Test) Rules 2020 (No.1) (Time a supply is treated as being made when calculating an entity’s current GST turnover in a test period) Coronavirus Economic Response Package (Payments and Benefits) Alternative Reference Period Determination 2020 (Sets out an alternative reference period for specified individuals in determining whether the Tier 1 or Tier 2 rate of JK applies) Coronavirus Economic Response Package (Payments and Benefits) Higher Rate Determination 2020 (Sets out when Tier 1 JK rate applies to an individual because the Commissioner is satisfied that total hours worked are not readily ascertainable) Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020 (Alternative Test for JK 2.0)
JobKeeper extension (summary) Payment rates 80-hour threshold for employees How do I keep up with all these Decline in turnover tests ATO website content changes? Actual decline in turnover test Updates: 1. Access the ATO’s JobKeeper – Employers timeline of content updates Eligible employers Your eligible employees 2. The ATO has also created a Partnerships, trusts and companies JobKeeper Extension landing page Not-for-profits and charities Sole traders Exercise of the Commissioner's discretion Employees Is there a JK 2.0 info-graphic for Paying your eligible employees clients? Tax and BAS agents 1. ATO Info-graphic Keeping JobKeeper payment fair JobKeeper overpayments 2. CA ANZ Info-graphic Original decline in turnover test
General power of administration
• Some discretions, but used sparingly
Commissioner is empowered to:
• Design JobKeeper notices, forms
• Devise and apply alternative turnover tests
• Pay JobKeeper up front
• Delay payment to verify entitlement James O’Halloran
Deputy Commissioner,
• Seek return of overpaid amounts JobKeeper Payment Program
• Waive record-keeping obligations
• Apply integrity rules ATO has advised CA ANZ that
• Share information with others ‘blanket’ lodgment extensions
• JobKeeper 2.0: create procedures for for JK enrolments will not be
granted. Case by case
determining hours worked and whether
consideration given to agent
EBPs were ‘actively engaged’ applications.JobKeeper 2.0 – Eligible employers
JobKeeper 1.0 rules apply till 27
September 2020
New legislation passed by
Parliament to extend + LIs
JK turnover test still supplemented
by Alternative Decline Tests
JK 2.0 actual turnover compared to
2019 period. BAS lodged?
JK 2.0 test turnover in September
and December 2020 quarters
(test separately)
Employers new to JK can jump
aboard JobKeeper 2.0 (extension
period 1 and \ or 2), but be mindful
of JK 1.0 and 2.0 turnover testsJobKeeper 2.0 – Two tiers, subsidy declines
Current JobKeeper 1.0 rules apply till 27
September 2020. Short prep time for v2.0
Two tier system introduced. Wage condition
based on reduced amounts. Allocate employees
to Tier 1 and 2. Communicate.
Hours worked determination. ATO guidance and
an alternative test for “unusual” hours. Do
systems evidence hours worked?
Prepare, reforecast & communicate 1st
reduction. Review salaries (wage condition)
Prepare, reforecast & communicate 2nd
reduction. Review salaries (wage condition)
Prepare for JK end date. Is this really the end?JobKeeper 2.0 – Employee eligibility
JK fortnights ending before
3 August 2020 – apply 1 March
2020 employee test
requirements
JK fortnights starting on or after
3 August 2020 - apply either the
1 March test, or satisfy the 1
July 2020 employee test
requirements
Obtain JobKeeper employee
nomination notice from 1 July
ATO alternative test (next slide) employees by 24 August 2020JobKeeper 2.0 – Actual decline in turnover
test
JK fortnights Applicable quarter for Comparable quarter:
between: measuring actual decline
in turnover:
28 September 2020 Ending 30 September 2020 Ending 30 September
to 3 January 2021 2019*
(inclusive)
4 January 2021 and Ending 31 December 2020 Ending 31 December
28 March 2021 2019*
(inclusive)
* Unless an alternative period is determined by ATO
50% Look at aggregated turnover in:
30% > • Current income year; and
or $1b ?
• Prior income yearJobKeeper 2.0 – Measuring the decline • Use actual GST turnover (not projected): • On a quarterly basis – GST exclusive • For both the test period and the 2019 comparison period • Ignore GST group (intra-group supplies are included) • Adjust for input-taxed supplies, margin scheme supplies • Accounting basis: • Allocate on a GST reporting basis (even if unregistered) • Use the method (cash \ accruals) used for GST reporting purposes • What’s “In” actual turnover? Refer paras 20 to 33, Law Companion Ruling LCR 2020/1 Special tax rules for: For most (not all) • Not GST registered • Not registered for all or part of test period, or • Changed GST reporting accounting basis
JobKeeper 2.0 – Current GST turnover
The amount of your sales except for:
• GST included in sales to your
customers (if any) Transactions which can
• sales that are input taxed sales (for boost your GST turnover
example, bank interest, sale of shares,
residential rental income) 1. Sale of business assets,
• sales not connected with an enterprise equipment etc.
you carry on (e.g. private car sale)
• sales not made for payment (unless a 2. Financial supplies (e.g.
issuing shares) are usually
taxable supply to an associate)
input taxed (i.e. excluded),
• payments for no supply (e.g. except when made to a non-
JobKeeper payments) resident (in which case it is
• gifts and donations (except for GST-free)
deductible gift recipients and ACNC-
registered charities)
• sales not connected with AustraliaJobKeeper 2.0 – GST adjustments
Adjustments don’t change the time when a supply is taken to have been
made when working out current GST turnover
Supply made Supply during Test
before Test Period
Period
• Any change in value • If change in value
for that supply arising occurs during test
during test period is period: change in
NOT included value is included
• If change occurs after
test period, the
change in value is not
includedJobKeeper 2.0 – Alternative decline tests Q1. Are there alternative decline in turnover tests for JobKeeper 2.0? Answer: Yes, and they are similar to JK 1.0 tests. Q2. Where are they?: Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020 (Alternative Test for JobKeeper 1.0) Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020 (Alternative Test for JobKeeper 2.0)
JobKeeper 2.0 – Turnover testing – EG 1
TWC Inc’s facts:
• Did not participate in JK 1.0 (didn’t expect to have a substantial decline)
• But has now experienced a decline in August and September 2020
• Wants to jump aboard JK 2.0
For JK 2.0 fortnights beginning from 28 September 2020, it satisfies:
Original decline test passed
• Projected GST turnover for September 2020 quarter compared
• Effectively look at value of actual supplies made
New decline test passed
• Actual turnover for September 2020 quarter compared
Proceed and:
1. Comply with other JobKeeper 2.0 enrolment requirements
2. Communicate with employees
Source: EM to Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020JobKeeper 2.0 – Turnover testing – EG 2
Tom Enterprises facts:
• Participated in JK 1.0 for 6 employees
• Doesn’t meet JobKeeper 2.0 turnover decline test, 28 September 2020
• But in early January 2021, it determines that it has had a 45% decline
in the December 2020 quarter, compared to the December 2019
quarter
For JK 2.0 fortnights beginning from 4 January 2021, it satisfies:
Original JK 1.0 decline test passed
• Due to previous participation in JobKeeper 1.0
• No need to retest original JobKeeper 1.0 turnover decline
New decline test passed
• Actual turnover for December 2020 quarter compared
Proceed and:
1. Comply with other JobKeeper 2.0 requirements
2. Communicate with employees
Source: EM to Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020JobKeeper 2.0 – Turnover testing - EG 3
PXLB Enterprises facts:
• Has not participated in JobKeeper before (turnover hadn’t declined)
• But in early January 2021, it determines that it has had a sufficiently
large decline in the December 2020 quarter, compared to the
December 2019 quarter
For JK 2.0 fortnights beginning from 4 January 2021, it must:
Notify ATO that it elects to participate in JobKeeper 2.0
Meet all relevant JobKeeper 2.0 requirements
Original decline test and new decline test passed
• Based on December 2020 quarter comparison December 2020
quarter turnover
Proceed and:
decline
1. Comply with other JobKeeper 2.0 requirements
2. Communicate with employees
JK 1.0 JK 2.0
Source: EM to Coronavirus Economic Response Package (Payments and Benefits)
Amendment Rules (No. 8) 2020
test testJobKeeper 2.0 – 1 July worker eligibility
Employee must meet all of the following criteria on 1 July 2020:
1. Employed as either a:
a) non-casual employee (whether full-time, part-time or fixed-term)
b) long-term casual employee (on a regular and systematic basis
during the 12 month period that ended 1 July)
2. Not “double-dipping” JK (from another employer or as an EBP)
3. Not on parental leave pay or worker’s comp
4. 18 years or older (or if 16 or 17 is independent, or not studying full-time)
5. Australian resident (s7 Social Security Act 1991) or both a tax resident
and holder of a Subclass 444 Special Category visa.JobKeeper 2.0 – New eligible employees
• Because of the 1 July 2020 reference date, the JK scheme has been
extended so that (for JK fortnights beginning on or after 3 August 2020):
• Existing employees (formerly ineligible) many now be eligible, or.
• Recently engaged or re-engaged employees may be eligible
Are 16 yrs, Are resident, or
Continuing JK Are “long-term
independent. hold visa
1.0 employees casuals”
Turned 18 yrs.
Met the 1 March Eligibility
2020 JK 1.0 Left Boss A Let go by Boss preserved as a
New. “1 March 2020
eligibility (JK1.0) and A (JK 1.0) & re-
Employed employee”
requirements, and joined Boss B hired (even
by 1 July
by 1 July after 1 July)
continue to be JK
2.0 eligible
Met the 1 July 2020 JK 2.0 requirementsJobKeeper 2.0 – EG 1 from EM
Not a long
Tilly
term casual
✘ ✘ New
hire
ABG Cafe
Tilly Bonnie
Source: EM to
Coronavirus
Economic
Response
Tilly Bonnie
Package
(Payments and
Benefits)
Amendment Rules
Continuing JK Now a long- Employed
(No. 7) 2020 1.0 employees term casual by 1 JulyJobKeeper 2.0 – EG 2 from EM
• Met JobKeeper 1.0 eligibility
OldJob requirements
Pty Ltd
Lee
Source: EM to
✘
Coronavirus
Economic • Lee resigned or terminated
Response
Package
(Payments and
• OldJob Pty Ltd no longer eligible
Benefits) for JobKeeper 1.0 in respect of Lee
Amendment Rules
(No. 7) 2020
• Meets JobKeeper 2.0 eligibility
NewJob requirements
Pty Ltd • NewJob Pty Ltd notifies Lee of JK
Employed 2.0 enrolment and seeks employee
by 1 July nomination form from LeeJobKeeper 2.0 – EG 4 from EM
• Met JobKeeper 1.0 eligibility
HYLT requirements for JK fortnight
Pty Ltd beginning 30 March 2020
Rosie
Source: EM to
• Rosie terminated
✘
Coronavirus
Economic
Response
Package
• HYLT no longer eligible for
(Payments and JobKeeper 1.0 in respect of Rosie
Benefits)
Amendment Rules
(No. 7) 2020
• 28 July 2020, Rosie re-hired FT
• Rosie not JK eligible with any other
HYLT employer
Pty Ltd • HYLT qualifies for JK2.0 (Rosie is a
Let go and
rehired preserved 1 March 2020 employee)
• Rosie gives s10B notice to HYLTJobKeeper 2.0 – Obtain employee notifications and nominations Employer must give written notice of its JK 2.0 election to each employee (excluding those already notified, e.g. for JK 1.0 purposes, or those who have already provided the employer with a nomination notice) Special rules apply to 1 March 2020 employees (e.g. those who were let go when receiving JK 1.0 and then re-hired)
JobKeeper 2.0 – Proving workers 80+ hours
1. Identify the 28 day reference period*, ending at
the end of the most recent pay cycle ending
before: Please boss,
• 1 March 2020, or “Most beneficial” get me the
• 1 July 2020 outcome rule higher
2. Calculate actual hours worked (includes JobKeeper
overtime hours). rate!
3. Add paid leave hours
4. Add paid public holidays Tier 1 JK rate
Is total 80 hours or more?
* ATO can determine an alternative reference period (e.g.
if employed for part of reference period, unpaid leave)
Tier 2 JK rate
Higher risk employee categories for proving Tier 1 entitlement:
■ Part-time ■ Long-term casuals ■ Not paid on an hourly basisJobKeeper 2.0 – ATO Determination
Designed for employee scenarios like: Please boss,
get me the
• Commission higher
• Stipend JobKeeper
• Piece rates rate!
1. Hours for a class of
Employer has no records, or has
employees not readily
incomplete records
ascertainable
(a) Paid $1,500 or more in ref period, or
2. ATO determines Tier 1
(b) Award, contract etc 80 hours
JK rate applies
(c) Use “reasonable assumptions”
Coronavirus Economic Response Package (Payments and Benefits) Higher Rate
Determination 2020 and ATO website guidanceJobKeeper 2.0 – Communications Employer must notify ATO whether the Tier 1 rate or Tier 2 rate applies to each of the eligible employees. (do this before claiming JK payment for fortnights starting from 28 September 2020) Employers are also required to inform employees if they are: • Tier 1 rate • Tier 2 rate Within 7 days of giving ATO notice Transparent workplace comms vital Relevant to both: • ATO • Fair Work
JobKeeper 2.0 – JK Fortnights & pays Source: https://www.ato.gov.au/General/JobKeeper-Payment/JobKeeper-key-dates/
JobKeeper 2.0: Is EBP ‘actively engaged’? Awaiting ATO Guidance
EBP hours worked reference period +
alternatives Use an alternative reference period if:
• total hours of active engagement in the
business was less than 80 hours in
The standard
February 2020, and
reference period
• when compared to earlier 29-day
periods (each wholly within a calendar
month), February 2020 is not
representative of typical number of
hours of active engagement in your
business.
The alternative period is the most recent
29-day period (wholly within a calendar
month), which is representative, ending
before 1 March 2020.
Example: EBP was sick in February 2020Alternative reference periods, if in February
A new partner, adult Conducted business (or some of it)
beneficiary or shareholder or in a declared drought or natural
director disaster zone
The alternative period is the 29 The alternative period is the most
day period starting on the day the recent 29-day period ending before 1
EBP became a partner, March 2020 during which business
beneficiary, shareholder or was conducted in the zone.
director.Records: Does the EBP keep any of these?
EBP actively engaged for at least 80
hours during their reference period
should keep records
Records might include:
• business diaries
CA ANZ has conveyed to the
• appointment books
ATO our concerns about how
• hours billed
in practice the hours test for
• invoices issued
EBPs can be applied and
• time sheets
proved,
Query whether a CA could attest to hours worked by client?• Undertake turnover testing (for ATO and Fair Work purposes)
• Enrol and apply on behalf of any new eligible employer
• Identify eligible employees and EBPs – Assist with workplace comms
• Assist with business monthly declaration
• Collate supporting documentation
• Liaise with ATO if Integrity Unit makes follow-up enquiries
https://www.ato.gov.au/General/JobKeeper-Payment/Tax-professionals/
Disclose JobKeeper in client tax returns
ATO will provide agents with a list of clients who have received JobKeeper as an employer or
EBP.
• Sole traders - include JK as business income in individual tax return
• Partnership, trust or company – include JK in entity tax return
Don’t include if client has “repaid or is in the process of repaying” JK.
Normal deduction rules apply to JK on-paid to employees.From 28 September 2020 – JobKeeper 2.0 1st extension starts
To claim JK for 1st extension period ending 3 January 2021:
• Demonstrate \ document turnover decline in September 2020 quarter
• Satisfy the original decline in turnover test. However, if:
• Entitled to receive JK for fortnights before 28 September, employer has already satisfied the
original decline in turnover test
• Enrolling in JK for first time from 28 September 2020, satisfy both the actual decline in turnover
test and original decline in turnover test.
• Pay eligible employees at least the JK amount that applies ($1,200 or $750)
• Advise ATO which JK rate applies to each eligible employee (if JK enrolled already, do this in
November monthly declaration)
• Inform eligible employees within 7 days of notifying ATO of their payment rate.
30 September 2020 – enrolments close for September fortnights
Enrolment deadline to claim payments for the September JK fortnights.
Between 1 and 14 October: Complete October JK monthly business declaration to be reimbursed for
payments made in September
Between 1 and 31 October: Determine and submit decline in turnover for September quarter
31 October 2020 – Wage condition for JobKeeper 2.0 (1st extension period)
For JK fortnights starting 28 September 2020 and 12 October 2020 only, employers have until 31 October
2020 to meet the wage condition
Between 1 and 14 November: Complete November JK monthly business declaration to be reimbursed for
payments you made in October, and tell ATO which payment tier is claimed for each employee and EBPMichael Croker
Australian Tax Leader
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