ATO JobKeeper extension deadlines ahead of Christmas / New Year
JobKeeper deadlines for the second extension period have now been extended by the ATO ahead of the festive season.
Completion of the December business monthly declaration, for employers to be reimbursed for payments between 23 November 2020 to 3 January 2021, has also been extended from the usual 14th of each month to 28 January 2021.
To account for the New Year weekend, the Tax Office will also allow employers to meet the wage condition for payments between 21 December and 3 January 2021 by 4 January 2021.
From 4 January, the second extension period for JobKeeper will commence, reducing payment rates to $1,000 per fortnight for those on the Tier 1 rate, and $650 per fortnight for those on Tier 2.
Entities will be required to demonstrate that their actual GST turnover has declined by the requisite shortfall for the December 2020 quarter, with the ATO to make the new decline in turnover form available on its systems from 4 January.
New employers enrolling for the first time, and existing employers, will be required to submit the decline in turnover form by 31 January.
Employers will also be given until 31 January 2021 to meet the wage condition for fortnights starting on 4 January and 18 January 2021.
JobKeeper extension periods
The extension of the scheme operate in two separate periods:
- Extension 1: 28 September 2020 to 3 January 2021
- Extension 2: 4 January 2021 to 28 March 2021
Payment rates are split into two separate tiers based on eligibility.
Tier 1 rate applies to:
- eligible employees who worked 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020
- eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration to that effect
Tier 2 rate applies to any other eligible employees and eligible business participants.
The fortnightly payment rates (before tax) that apply to eligible employees within each tier will change for each extension period as follows:
|Extension Period||Tier 1||Tier 2|
|Extension 1 (28/9/20 – 3/1/21)||$1200||$750|
|Extension 2 (3/1/21 – 28/3/21)||$1000||$650|
Decline in turnover test:
Both these extension periods will require satisfaction of an additional actual decline in GST turnover test as follows:
|Extension 1 (28/9/20 – 3/1/21)||September Quarter (Jul, Aug, Sept) relative to comparable period (usually same 2019 Q)|
|Extension 2 (3/1/21 – 28/3/21)||December Quarter (Oct, Nov, Dec) relative to comparable period (usually same 2019 Q)|
In addition, you will also need to satisfy the original decline in turnover test UNLESS you:
- were entitled to receive JobKeeper payments for fortnights prior to 28 September 2020 and have already satisfied the original test
- are enrolling in the scheme for the first time from 28 September 2020 onwards and have satisfied the new actual decline in turnover test (as by default, you would pass the original decline in turnover test)
How does this differ from the original JobKeeper test?
- The decline in turnover must be demonstrated for specific quarters only
- Rather than using projected GST turnover for the relevant quarter being tested, you use your current GST turnover
- You must allocate sales to the relevant quarter in the same way you would report these sales to a BAS if you were registered for GST
- If you are not registered for GST, you will work out your turnover using either the GST cash or non-cash basis of accounting
Alternative tests for determining actual decline in turnover may be available in some circumstances. These will apply in a similar way to the alternative tests for the original decline in turnover test. However, they must be applied on a quarterly period. We will provide more information on Alternative tests when it is available from the ATO.
Action Items – What you NEED to do
From 4 January 2021, you are required to:
- Determine your eligibility for the JobKeeper Extension scheme using the actual turnover test for the December 2020 quarter
- Determine if you have any new eligible employees that were not previously nominated for JobKeeper and ask them to agree to be nominated
- Work out the Tier 1 or Tier 2 rate of pay that you will be claiming for each eligible employee/eligible business participant
- Notify your eligible employees which payment rate is applicable for them
- Ensure your eligible employees/eligible business participants receive the correct rate of payment per fortnight during each of the JobKeeper Extension periods according to the two tiers of payment
- If you are registered for GST and have outstanding Business Activity Statements (BAS), ensure you lodge your BAS for the September 2019 and December 2019 quarters now (or for equivalent months, if you report monthly) so that you don’t hold up your application for the JobKeeper Extension Scheme
What you do NOT need to do
If you are already enrolled for the current JobKeeper Scheme for fortnights prior to 3 January 2021, you do NOT need to:
- Re-enrol for the JobKeeper Extension Scheme but you do need to complete the new decline in turnover form (available from 4 January 2021)
- Re-assess eligibility for employees already receiving JobKeeper for the JobKeeper Extension Scheme or ask them to agree to be nominated
- Meet any further requirements if you are claiming for an eligible business participant, other than holding an ABN and declaring assessable income and supplies
Need JobKeeper help?
JobKeeper brings a lot of changes and requirements and we have been assisting many businesses with their JobKeeper eligibility and enrolment enquiries and application processes. Our team at Allan Hall Business Advisors can assist you to navigate this process smoothly and efficiently. Please contact us should you require assistance or have any further questions.
The ATO also offers a factsheet outlining the key changes of the JobKeeper Extension Scheme.