JobKeeper 2.0 - What you need to know

On Tuesday the Federal government announced that The JobKeeper wage subsidy program has been extended until March 2021, although it will be at lower rates and with additional eligibility testing for small businesses and sole traders.

The key points of the revised program are:

• A second phase of the JobKeeper program will run to March 28, 2021;

• Two tiers of JobKeeper will be introduced, based on hours employees worked in February;

• The higher tier pays $1,200 a fortnight until January 3, 2021, after which it will reduce to $1,000 a fortnight;

• The lower tier pays $750 a fortnight until January 3, 2021, after which it will reduce to $650 a fortnight; and

• JobKeeper eligibility will be re-tested in October and early January 2021, based on turnover decline.

The two tiers of JobKeeper 

There will now be two tiers of JobKeeper payments, which is determined by how many hours eligible staff worked before the COVID-19 pandemic set-in in February 2020.

• Eligible staff that worked 20 hours or more each week in February will be eligible for the higher tier, while those that worked less than this threshold are eligible for the lower tier of payments.

• The higher tier will pay $1,200 a fortnight until January 3, 2021. It will then reduce to $1,000 a fortnight until the program ends on March 28, 2021.

• The lower tier will pay $750 a fortnight until January 3, 2021. It will then reduce to $650 a fortnight until the program ends on March 28, 2021.

The minimum wage condition will still apply, meaning businesses still won’t be allowed to pay staff a lower hourly rate than they were previously entitled to.

In practice, this means employers will be required to pay a higher proportion of their wage bills under JobKeeper 2.0.

Revised eligibility tests

The revised eligibility tests will run along the same turnover criteria as JobKeeper 1.0, but will require businesses to demonstrate an actual decline in revenue against a comparable period rather than forecasts.

Employers will be required to demonstrate their turnover declined at least 30% for both the June and September quarters to be eligible for JobKeeper payments covering the December quarter.

Additionally, employers will need to demonstrate they also meet the turnover decline across the December quarter to remain eligible for JobKeeper payments through to March 28, 2021.

For more information and to enrol for JobKeeper visit the ATO website.