“Once more unto the breach, dear friends, once more”
– William Shakespeare, Henry V
Here we are again, accounting software and spreadsheets running hot as we all work out our eligibility for Jobkeeper 2.0. The federal government announced recently it will be extended until the end of March next year, though with stricter eligibility criteria and progressively diminishing payments.
Read on for a summary of the Jobkeeper extension, as it applies to small business.
Beyond the conclusion of the first Jobkeeper round, which takes place on the last Friday of September, it will be split into a further two periods:
- October to December 2020
- January to March 2021
Broad eligibility for Jobkeeper remains the same. Your business must have:
- Annual revenue less than $1b
- Reduced turnover at least 30% less than the same periods last year
Note that there are different requirements for not-for-profit organisations and really big businesses whose turnover > $1b. I won’t cover these here, but you can check out the Department of Treasury website for more information.
In addition, to qualify for each of the two extension periods you will need to demonstrate that your business has continued to experience a decline in turnover since Covid-19 kicked off in March:
- To qualify for the December 2020 quarter extension, your business must have had reduced turnover of 30% for the September 2020 quarter compared to the September 2019 quarter
- To qualify for the March 2021 quarter extension, your business must have had reduced turnover of 30% for the December 2020 quarter compared to the December 2019 quarter
Unfortunately, architecture and other creative businesses can have fluctuating income that varies wildly from month to month. It’s currently unclear whether this will put you out of contention for the Jobkeeper extension if a few bad months back in 2019 make 2020 look less rubbish than it has actually been.
However, I’m going to be optimistic and speculate that the ATO will soon announce a similarly lenient approach to this issue as it did for round one, providing opportunities for businesses to demonstrate a decline in turnover via a number of alternative pathways. I suggest speaking to your accountant about this, and keeping your ear out for more detail that I hope will be forthcoming between now and the end of September.
As with your overall business eligibility, employee eligibility remains the same. Your employees must:
- Be currently employed by you
- Have been employed by you on 1 March 2020
- Have been aged eighteen years or older on 1 March 2020
- Be an Australian resident or hold a special category visa, subclass 444 (I had to look this one up, it’s for New Zealand citizens living in Australia)
The federal government has indicated a desire to progressively peg back on Jobkeeeper payments to incentivise industry to gradually return to self sufficiency. This will take shape in two ways:
- Fortnightly payments for the December 2020 quarter will be less than they have been during round one, and less again for the March 2021 quarter
- Payments will be split into two tiers, one for full-time and another for part-time employees
For the December 2020 quarter, fortnightly payments will be:
- $1,200 for full-time employees
- $750 for part-time employees
For the March 2021 quarter, payments will be:
- $1,000 for full-time employees
- $650 for part-time employees
Note that a full-time employee is someone who, in February earlier this year, worked for your business for an average of 20 hours or more each week.
As far as I’m aware, logistics will remain the same as they have been thus far. If you haven’t already, you’ll need to register with the ATO here and follow the many-stepped process I’ve previously outlined here. Once you’ve been approved, the ATO business portal will continue to be your friend for your fortnightly payments. Nothing has been announced yet, but I imagine this is also where you’ll prove your eligibility each quarter.
Case study #1
You have an employee who was employed full-time back in February at a rate of $2,500 per fortnight. She is still working full-time for you now.
She is eligible to receive Jobkeeper payments of $1,200 per fortnight during the December 2020 quarter and then $1,000 per fortnight during the March 2021 quarter. You’ll need to top up these payments so she receives her regular $2,500 wages per fortnight.
Case study #2
You have an employee who was employed full-time back in February at a rate of $2,500 per fortnight. Unfortunately the amount of work in your business has reduced, so she is currently stood down.
She is still eligible to receive Jobkeeper payments of $1,200 per fortnight during the December 2020 quarter and then $1,000 per fortnight during the March 2021 quarter. As she is stood down, you don’t need to top up these payments.
Case study #3
You have an employee who you employed part-time back in February at a pro-rata rate of $1,500 per fortnight. She is still working part-time for you now.
She is eligible to receive Jobkeeper payments of $750 per fortnight during the December 2020 quarter and then $650 per fortnight during the March 2021 quarter. You’ll need to top up these payments so she receives her regular $1,500 wages per fortnight.
Wait there’s more! Bonus cash!
For those of you in Victoria, the State Government has also announced an extension of its Business Support Fund grant. This is available up until 14 September and is available if your business:
- Is eligible for the Jobkeeper payment scheme
- Employs someone other than yourself and is registered with WorkSafe
- Has annual payroll less than $3m
- Is registered for GST
- Holds an ABN
The grant value is:
- $10,000 if you’re located in metropolitan Melbourne or the Mitchell Shire
- $5,000 if you’re located elsewhere in Victoria
As before, the good new is that the grant funds can be used for pretty much any purpose that will help your business:
- Meeting business costs e.g. utilities, salaries or rent
- Seeking financial, legal or other advice to support your business planning
- Developing your business through marketing and communications activities
- Any other activities related to the operation of your business
I can highly recommend spending the time submitting for this, it’s incredibly easy and a great way to inject some cash into your coffers. If you haven’t already, head to Business Victoria right now to get cracking on your application. It will take you around half an hour from start to finish. You can thank me later.
- Australian Tax Office
- Australian Tax Office business portal
- Department of Treasury
- Business Victoria
Once again, I hope you’ve managed to survive what have been difficult months so far and continue to do so for the months ahead. A collection of Panfilo articles related to Covid-19 can be accessed here.
- Ah, I remember the good old days so fondly… Meals out, visits to the cinema, human touch.
- Ultrastructure of the Covid-19 virus; sourced from New Scientist.