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What you need to know about JobKeeper’s second extension

What you need to know about JobKeeper’s second extension

Many businesses have needed to access the JobKeeper scheme throughout 2020.

The scheme acts to reimburse all or a portion of the wages for employees retained by businesses during the coronavirus-induced recession.

The original scheme was designed to run to September 28, 2020, after which there would have been a hard cut-off and finalisation of the program.

However, due to the lingering economic impact of the pandemic, the original scheme has subsequently been expanded into two extension periods.

Here’s what you need to know:

JobKeeper: first extension

The first extension period for JobKeeper, which we are currently in, runs from September 28, 2020 to January 3, 2021.

To qualify for that extension period, a business needed to demonstrate a decline in turnover of greater than 15% (for ACNC-registered charities), 30% (for businesses with an annual turnover of less than $1 billion), or 50% (for businesses with an annual turnover of greater than $1 billion) for the period July 1, 2020 to September 30, 2020, relative to the equivalent period a year earlier.

For this first extension period, the rate of reimbursement was $1,200 per fortnight for an employee who could be demonstrated to have worked at least 80 hours for the business during the 28 days leading up to either March 1, 2020 or July 1, 2020 (Tier 1 employees), and $750 per fortnight for all other employees (Tier 2 employees).

JobKeeper: second extension

The second extension period for JobKeeper will run from January 4, 2021 to March 28, 2021.

For the second extension period, the rate of reimbursement will be $1,000 per fortnight for Tier 1 employees and $650 per fortnight for Tier 2 employees.

The key eligibility requirement to access the second extension period is again based on displaying the respective 15%, 30%, or 50% turnover reductions based on the business size. However, this time turnover must be compared for the period October 1, 2020 to December 31, 2020 to an equivalent period, usually the same one a year earlier.

It’s important to note that you do not need to have qualified for the original JobKeeper scheme or the JobKeeper first extension to enrol in the JobKeeper second extension period. If a business can display the required turnover decline in the December quarter, it will qualify for the scheme.

Check your eligibility for JobKeeper’s second extension period

With just a few weeks left in December, it would be prudent for businesses to begin assessing their likelihood of qualification for JobKeeper’s second extension period to enable appropriate payroll planning and management of business cash flow into the new year.

With many businesses taking a break over the festive period, and new payment rates coming into effect for employees paid from January 4, 2021 onwards, the Australian Taxation Office has granted an extension to January 31, 2021. This will ensure correct payments have been made to employees and to formally report on their eligibility to enter or remain in the JobKeeper scheme.

Get expert advice on JobKeeper

LDB’s tax and business advisors can assist with the assessment of JobKeeper eligibility, ongoing management of JobKeeper reimbursement claims, and any cash flow management assistance which your business may require.

To speak with one of our trusted advisors, give us a call on (03) 9875 2900 or send us a message via our contact form below.

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