JobKeeper 2.0 – What Does it Mean for Your Tech Business?
5th May 2020
Highlights
- Scott Lindeblad, Manager from William Buck (ACS Queensland’s Preferred Accounting Partner) provides a summary of the recently announced JobKeeper 2.0 provisions and what it means for your tech organisation.
- William Buck Queensland are experts in cash flow forecasting and Government stimulus packages and are offering all ACS members a complimentary consultation to assess their eligibility for the upcoming JobKeeper 2.0. For more information, please contact Scott Lindeblad to discuss your businesses circumstances.
While the economy is slowly crawling back to life, with the latest COVID outbreak in Melbourne and potentially Sydney trying to do everything they can to ensure they avoid a second wave, the Government has now released details of JobKeeper 2.0, the extension to the JobKeeper payments scheme which is due to end on 27 September.
JobKeeper 2.0 will be tiered and more targeted to those businesses who have continued to be affected by the fallout from the COVID-19 pandemic. The new scheme, due to take place from 28 September, has been extended to 28 March 2021, however there are additional turnover tests to determine whether your business will continue to be eligible. In addition, payment amounts will be reduced and adjusted depending on the number of hours an employee works.
Tier 1 Payments
The first tier will cover the period 28 September 2020 to 3 January 2021 and to be eligible, a business will need to show a significant decline based on actual GST turnover i.e. 30% for businesses with less than $1 billion turnover, for the periods April to June 2020 and July to September 2020, compared with the same periods for 2019. Unfortunately, if a business can show a decline for the April to June 2020 quarter but not the July to September 2020 quarter, they will not be eligible for JobKeeper 2.0.
Where a business is eligible for Tier 1, the payments they can receive for employees will be reduced and based on the number of hours an employee works. Where an employee works 20 hours or more, the gross payment before tax will be reduced to $1,200 per fortnight and where an employee works less than 20 hours per week, the payment will be reduced to $750 per fortnight.
Tier 2 Payments
The second tier will cover the period 4 January 2021 to 28 March 2021 and once again a business will need to show a significant decline in their actual GST turnover, however this time it will need to be across the April to June 2020, July to September 2020 and October to December 2020 quarters compared with their 2019 periods. This follows the Governments theme of ensuring the JobKeeper payments are targeted to those business who are continuing to be significantly affected by the COVID pandemic.
For those businesses who continue to be eligible for the JobKeeper scheme, the payments from 4 January 2021 will reduce to $1,000 gross per fortnight for employees who work 20 hours or more and $650 gross per fortnight for employees who work less than 20 hours per week.
Summary
The Government has provided an extended lifeline for many businesses, however not all will be continuing to survive once the existing JobKeeper scheme ends. With September looming, it is imperative businesses start assessing their actual GST turnover now to determine whether they are going to be eligible for JobKeeper 2.0.
For businesses who are not going to be eligible, they should be planning and preparing short-term cash flow forecasts now to understand their cash position come October.
William Buck are ACS Queensland’s Preferred Accounting Partners. William Buck Queensland are offering all ACS members a complimentary consultation to assess their eligibility for the upcoming JobKeeper 2.0.