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Jobkeeper 2.0

Warwick Mihaly

Covid-19; Pandemic; Virus; Science

“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.

Periods

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:

Business eligibility

Broad eligibility for Jobkeeper remains the same. Your business must have:

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:

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.

Employee eligibility

As with your overall business eligibility, employee eligibility remains the same. Your employees must:

Payments

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:

For the December 2020 quarter, fortnightly payments will be:

For the March 2021 quarter, payments will be:

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.

Logistics

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.[1] 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:

The grant value is:

As before, the good new is that the grant funds can be used for pretty much any purpose that will help 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.

Further reading

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.

Footnote:

  1. Ah, I remember the good old days so fondly… Meals out, visits to the cinema, human touch.

Image:

  1. Ultrastructure of the Covid-19 virus; sourced from New Scientist.
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