JobKeeper 2.0 Legislation

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The Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020 received Royal Assent on 3 September 2020. Apart from extending the end date of the JobKeeper scheme from 27 September 2020 to 28 March 2021, the Bill contains amendments to the Fair Work Act 2009 which will have a significant impact on the role of tax agents assisting their clients.

Decline in Turnover Certificate

Under the current rules, an employer who is eligible for the JobKeeper subsidy is allowed to make certain JobKeeper enabling directions under the Fair Work Act, such as directions to reduce an employee’s hours, the type of duties to be performed and performing duties at a different location.

Employers who will be eligible for the extended JobKeeper scheme from 28 September 2020 will be able to continue providing JobKeeper enabling directions. However, employers who will not be eligible for the extended scheme, will only be allowed to continue with JobKeeper enabling directions if they can demonstrate a 10% decline in turnover.

The 10% decline in turnover test requires that for a JobKeeper enabling direction made between:

  • 28 September 2020 – 27 October 2020, the employer must have suffered a 10% decline in GST turnover for the June 2020 quarter compared to the June 2019 quarter;
  • 28 October 2020 – 27 February 2021, the employer must have suffered a 10% decline in GST turnover for the September 2020 quarter compared to the September 2019 quarter; and
  • 28 February 2021 – 28 March 2021, the employer must have suffered a 10% decline in GST turnover for the December 2020 quarter compared to the December 2019 quarter.

Importantly, employers will need to obtain a 10% decline in turnover certificate from an eligible financial service provider, such as a tax agent or qualified accountant.

Accordingly, clients who will be seeking to continue JobKeeper enabling directions post 27 September 2020, will no doubt request their tax agents for decline in turnover certificates. Accountants will need to carefully consider their obligations in providing these certificates.

At this stage, no prescribed form for the decline in turnover test certificate has been issued and we will be awaiting further guidance from the ATO on this.

ATO Guidance

The ATO has also updated its guidance on the treatment of the JobKeeper subsidy for the purposes of working out aggregated turnover. While the ATO considers that JobKeeper payments are ordinary income, they are not derived in the ordinary course of business.

Accordingly, JobKeeper payments are not taken into account when working out aggregated turnover amounts relevant for the small business CGT concessions, the instant asset write-off, base rate entity tax rate and the Small Business Entity classification.

Accordingly, JobKeeper payments are not taken into account when working out aggregated turnover amounts relevant for the small business CGT concessions, the instant asset write-off and base rate entity tax rate.

If you have any queries on JobKeeper in general, please contact Gaurav Chitnis.

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