The JobKeeper 1 July eligibility changes are now in effect, which could see staff employed by 1st July now eligible for JobKeeper, an extension from the previous 1st of March reference date. Employers have been given until the end of the month to satisfy the wage condition.
ATO guidance now notes that for the fortnights commencing on 3 and 17 August, the Tax Office will provide employers until 31 August to meet the wage condition for all new eligible employees under the 1 July eligibility test.
However, the legislative instrument notes that the JobKeeper employee nomination notice must be provided within seven days of the commencement of the instrument — effectively giving employers until this Friday to do so.
The Tax Institute’s senior advocate, Robyn Jacobson, said business should now consider a range of employees who would now be eligible under the new 1 July eligibility test.
This could include casuals who did not meet the definition of a long-term casual employee by 1 March but have since become long-term casual employees by 1 July, or employees who did not qualify on 1 March due to their age or visa status but have since become 16 or 17 and meet the independence and study conditions, or 18 years, or obtained the necessary visa.
“The one in, all in rule means that any full-time or part-time employee hired between 2 March and 1 July 2020 who meets the age and residency requirements, or casuals who also meet the 12-month condition to be a long-term casual employee, will need to be provided with a nomination notice,” Ms Jacobson said.
“The eligibility of existing employees is preserved if they are already covered by JobKeeper based on the 1 March 2020 reference date. Retesting of their eligibility is not required.
“However, the new rules provide that employers must provide a nomination notice to their employees who are now eligible based on the 1 July 2020 employment test by 21 August 2020. The profession is seeking for the commissioner to allow employers more time to meet this requirement, in line with the extension to the end of August to enrol and meet the wage condition for fortnights 10 and 11.”
Changes to the JobKeeper rules also now allow individuals who have nominated as an eligible employee or eligible business participant with one entity to re-nominate as an eligible employee of another entity in limited circumstances.
To re-nominate, the individual must have ceased their employment or business participation with the first entity before 1 July, and commenced their employment with the new entity by 1 July.
The legislative instrument also notes that separate amendments will soon be released to detail the JobKeeper 2.0 extension and the two tiers of payments beyond 27 September.
New JobKeeper Test Date for Employees and Additional Flexibility
On Friday 14 August 2020, the Treasurer released updated the JobKeeper Rules dealing with eligible employees which apply from 3 August 2020 onwards. Specific rules dealing with JobKeeper 2.0 have not yet been released.
New test date for employees
Under the original JobKeeper rules, an employee generally needed to have been employed by the entity at 1 March 2020 and to have met certain conditions as at that date to qualify as an eligible employee. However, the Government has updated the rules to ensure that 1 July 2020 will be relevant test date rather than 1 March 2020 from 3 August 2020 onwards, which means that some additional employees might become eligible for JobKeeper from the 10th JobKeeper fortnight onwards. Employees who met the conditions at 1 March 2020 will continue to be eligible assuming they are still employed by the entity etc.
In practical terms this means:
- If someone commenced employment with an entity after 1 March 2020 but by 1 July 2020 and they were an employee of the entity on that date then they can potentially be eligible for JobKeeper from 3 August 2020 onwards, assuming all other basic conditions are met.
- Casuals who hadn’t been employed for at least 12 months leading up to 1 March 2020 can potentially be eligible for JobKeeper if they have been employed on a regular and systematic basis for at least 12 months leading up to 1 July 2020 (assuming all other basic conditions are met).
- Individuals who failed the age-related conditions or residency conditions at 1 March 2020 can potentially be eligible employees if they met those conditions on 1 July 2020.
Employers need to ensure that they identify all additional employees who could be eligible for JobKeeper to ensure that they comply with the “one in, all in” principle and that they meet the nomination requirements.
Extended deadline for top-up payments
Crucially, the ATO has announced that the deadline for making payments for new eligible employees for JobKeeper fortnights starting on 3 August 2020 and 17 August 2020 has been extended to 31 August 2020 (ie, to meet the condition for employers to pay at least $1,500 to eligible employees in each JobKeeper fortnight).
Employees who have moved to a new employer
The other key change to the rules is that someone who was previously nominated for JobKeeper with an entity as an eligible employee or eligible business participant can potentially be nominated for JobKeeper with a different entity if certain conditions are met. The individual must have ceased to be employed or actively engaged in the business (as a business participant) of the original entity after 1 March 2020 but before 1 July 2020. They must also meet the conditions to be treated as an eligible employee of the new employer at 1 July 2020.
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