JobKeeper 2.0 Update & Super Guarantee Amnesty Reminder

10 August 2020

JobKeeper 2.0 Update

Update On 7th August 2020 the government announced the adjustments made to JobKeeper 2.0.We herein summarise the crucial amendments and updates.

Firstly, the government has softened the eligibility criteria for JobKeeper 2.0 turnover test period.

Businesses will only have to show a significant decline* in actual turnover in the September quarter compared with the same quarter in 2019 to be eligible for JobKeeper payments from 28 September 2020 to 3 January 2021, instead of having to show a decline in actual turnover in both June quarter and September quarter.

And businesses will only have to show a significant decline* in actual turnover in the December quarter compared with the same quarter in 2019 to be eligible for JobKeeper payments for the three months from 4 January 2021, instead of having to show a decline in actual turnover in all the June, September, and December quarters.

* significant decline refers to

50 per cent for those with an aggregated turnover of more than $1 billion;

30 per cent for those with an aggregated turnover of $1 billion or less; or

15 per cent for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).

Secondly, eligible employees employed as of 1 July 2020 can be included in the JobKeeper 2.0 claims. The previous relevant date of employment was 1 March 2020. Following the change, the 20 hour per week test period is updated accordingly refer below.

The JobKeeper Payment rate

From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be: • $1,200 per fortnight for all eligible employees who were working in the business or not-for-profit for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average; and

• $750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be: • $1,000 per fortnight for all eligible employees who were working in the business or not-for-profit for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for business participants who were actively engaged in the business for 20 hours or more per week on average; and

• $650 per fortnight for other eligible employees and business participants.

Businesses and not-for-profits will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants).

The Commissioner of Taxation will have discretion to set out alternative tests where an employee or business participant’s hours were not usual during the February and/or June 2020 reference period (the period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility). For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February or June 2020.

Super Guarantee Amnesty Reminder

This is a reminder that the Super Guarantee Amnesty ends on 7 September 2020.

The amnesty was introduced by the government on 6 March 2020. It allows employers to disclose and pay previously unpaid super guarantee charge (SGC), including nominal interest, they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018. Eligible disclosures will not incur the administration component ($20 per employee per quarter) or Part 7 penalty. In addition, payments of SGC made to the ATO after 24 May 2018 and before 11.59pm on 7 September 2020 will be tax deductible.

We herein enclosed extract from the ATO website regarding how the ATO may assist employers that wish to participate in the amnesty but unable to make full payment by the 7 September 2020

COVID-19 effects

We understand you may wish to apply for the super guarantee amnesty (the amnesty) and may be concerned that, as a result of COVID-19, your circumstances may change and you won't be able to pay the liability.

If you want to participate in the amnesty, the law requires you to apply by 7 September 2020.

However, we will work with you to establish a payment plan that is flexible to help you to continue making payments. These arrangements include:

• flexible payment terms and amounts which we will adjust if your circumstances change

• the ability to extend the payment plan to beyond 7 September 2020, the end of the amnesty period. However, only payments made by 7 September 2020 will be deductible.

If, after we work with you, you are unable to maintain payments, the law requires us to disqualify you from the amnesty and remove the amnesty benefits. However:

• the disqualification will only apply to any unpaid quarters

• we will advise you which quarters are unpaid – for these quarters we will re-apply the administration component of $20 per employee included in the disqualified quarter

• we will also take your circumstances into account when deciding whether a Part 7 penalty should be applied to your disclosure – a review of your circumstances may result in the Part 7 penalty being reduced to nil.

Important: Clients should not act solely on the basis of the material contained in this newsletter. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Client Alert is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.