Scott Morrison announces expansion of COVID-19 payment for third week of lockdowns, liquid asset test waived
JobKeeper Extension Update
The Government announced that the JobKeeper Payment would be extended until 28 March 2021 (i.e., for a further six months beyond its original end date of 27 September 2020).
As a result, JobKeeper Payments would now be made over two separate extension periods; JobKeeper Extension 1 and JobKeeper Extension 2.
Please read this update and action before 28 September 2020.
If you have any queries please do not hesitate to contact us.
JobKeeper 2.0 Announced
JobKeeper payments will drop to between $750 and $1,200 per fortnight beyond September, with eligibility tightened, the government has revealed. Prime Minister Scott Morrison and Treasurer Josh Frydenberg have announced that the current $1,500 per fortnight JobKeeper payment will be reduced to $1,200 per fortnight from 28 September, and $750 per fortnight for employees working less than 20 hours a week.
From 4 January, the rate will again fall to $1,000 per fortnight, and $650 for people working less than 20 hours a week. The program will run to 28 March 2021, at a further cost of $16 billion, taking the entire JobKeeper program to $86 billion.
The announcement comes after up to one in four of the 3.5 million workers currently covered under the program were earning $550 more than they would ordinarily.
New eligibility tests
Treasury had also argued for a fresh eligibility test for businesses looking to remain on JobKeeper beyond September. Businesses will still be required to demonstrate the required reduction in turnover- 30 per cent for businesses with turnovers of $1 billion or less, 50 per cent for those with turnover of more than $1 billion, and 15 per cent for ACNC-registered charities.
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If you have any queries please do not hesitate to contact us.
JobKeeper 2.0 Details
The existing JobKeeper Payment will continue as planned until 27 September 2020. The Government has announced yesterday that the payments will be extended to eligible businesses until 28 March 2021. However, there are significant changes to the regime:
Businesses must meet new and additional decline in turnover tests (based on actual GST turnover) to access payments in two new extension periods (28 September 2020 – 3 January 2021 and 4 January – 28 March 2021);
A tiered system of payments will apply from 27 September 2020, where the amount paid will be based on an employee's average hours worked per week before 1 March 2020. Those working on average 20 hours per week or more would be entitled to the higher tier payments and other eligible employees entitled to the lower tier payments; and
A staged reduction in the amount of payments – from 28 September 2020 to 3 January 2021 the higher tier payment will be $1,200 per fortnight, reducing to $1,000 per fortnight for 4 January to 28 March 2021, and the lower tier payment will be $750 per fortnight and $650 per fortnight for the same periods.
We highly recommend careful reading of this update in order to plan whether your business and employees may be eligible for JobKeeper 2.0.
We will post more information in relation to eligibility, enrolment and application once the details come to hand from the Treasury.
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If you require any assistance in relation to JobKeeper 2.0 eligibility please do not hesitate to contact us.
In response to the JobKeeper Payment Scheme release from the ATO, please see below the following documents:
MLCo JobKeeper Payment Scheme Summary
ATO JobKeeper Payment Scheme Release
ATO JobKeeper Employee Nomination Notice
These documents should be reviewed carefully in conjunction with each other as are technical and complex.
If you require any assistance in relation to JobKeeper eligibility or enrollment, please do not hesitate to contact us.
Please see below the ATO's release on the COVID-19 Early Release on Superannuation
ATO COVID-19 Early Release on Superannuation
If you require any taxation advice in relation to COVID-19 Early Release on Superannuation, please do not hesitate to contact us.
Updated Coronavirus Treasury Fact Sheets
Summary of Economic Response to Coronavirus:
Overview of Economic Response to Coronavirus
Support for Individuals & Households:
JobKeeper Payment: Supporting businesses to retain jobs
JobKeeper Payment: Information for Employees
Income Support for Individuals
Payments to Support Households
Temporary Early Access to Super
Providing support for retirees to Manage Market Volatility
Support for Businesses:
JOBKEEPER PAYMENT: SUPPORTING BUSINESSES TO RETAIN JOBS
JobKeeper Payment: Information for Employers
Boosting Cash Flow for Employers
Providing Temporary Relief for Financially Distressed Businesses
Delivering Support for Business Investment: Instant Asset Write off & Backing Business Investment
Supporting Apprentices and Trainees
Assistance for Severely Affected Regions and Sectors
Supporting Flow of Credit
ATO announces short cut method for claiming home office running costs
The Australian Taxation Office ('ATO') has announced a temporary simplified short cut method to make it easier for individual taxpayers to claim deductions for additional running expenses incurred (e.g., additional heating, cooling and lighting costs), as a result of working from home due to the Coronavirus pandemic.
Based on the announcement, the ATO will allow individuals to claim a deduction for all running expenses incurred during the period 1 March 2020 to 30 June 2020, based on a rate of 80 cents for each hour an individual carries out genuine work duties from home. This is an alternative method to claiming home running expenses under existing arrangements, which generally require an analysis of specific running expenses incurred and more onerous record-keeping.
ATO's 80 cents per hour method covers all running costs
The 80 cents per hour method is designed to cover all deductible running expenses associated with working from home and incurred from 1 March 2020 to 30 June 2020, including the following:
Electricity expenses associated with heating, cooling and lighting the area at home which is being used for work.
Cleaning costs for a dedicated work area.
Phone and internet expenses.
Computer consumables (e.g., printer paper and ink) and stationery
Depreciation of home office furniture and furnishings (e.g., an office desk and a chair).
Depreciation of home office equipment (e.g., a computer and a printer).
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