JobKeeper 2.0 Q&A: What will sole traders receive, can new workers join, and is the 20-hour rule flexible?

paying bills

JobKeeper 2.0 is coming, and there are a litany of changes to get across before September 28, when the first phase of the $86 billion wage subsidy program expires.

Below is a broad run down of the changes, followed by some frequently asked questions we’ve identified among SmartCompany readers.

JobKeeper 2.0 explained:

  • A second phase of the JobKeeper program will run to March 28, 2021;
  • Two tiers of JobKeeper will be introduced, based on hours employees worked in February;
  • The higher tier pays $1,200 a fortnight until January 3, 2021, after which it will reduce to $1,000 a fortnight;
  • The lower tier pays $750 a fortnight until January 3, 2021, after which it will reduce to $650 a fortnight; and
  • JobKeeper eligibility will be re-tested in October and early January 2021, based on turnover decline.

How much will sole traders receive?

Understandably, there’s some uncertainty among sole traders about whether they’ll be on the high or low tier of the new JobKeeper payment structure.

What we know is that sole traders (not any workers they have) are considered business participants for the purposes of JobKeeper 2.0.

The latest government advice states business participants will be subject to the 20-hour threshold that defines access to the high or low tier of JobKeeper payments.

That means, eligible sole traders who worked fewer than 20 hours per week in the four weeks to March 1, 2020, will fall under for the lower tier of payments.

Likewise, eligible sole traders that worked more than 20 hours per week in the four weeks to March 1, 2020, will be eligible for the higher tier of payments.

Can my new employees access JobKeeper?

Short answer: no.

The eligibility rules for employees remain largely unchanged. This means only staff who were on the books at March 1, 2020, will be eligible to receive payments under JobKeeper 2.0 from October.

Do employers still need to pay workers in advance?

Short answer: yes.

While some have argued the scheme should be changed to ease cashflow pressures on SMEs, the government has opted to maintain JobKeeper payments in arrears. This means businesses are going to have to continue fronting up wage payments, before be reimbursed.

“The JobKeeper payment will continue to be made by the ATO to employers in arrears. Employers will continue to be required to make payments to employees equal to,or greater than, the amount of the JobKeeper payment (before tax), based on the payment rate that applies to each employee,” says Treasury.

Is there any flexibility around the 20-hour rule?

Short answer: yes.

Under the extended JobKeeper program, workers will be paid on two different rates depending on whether they worked fewer than 20 hours a week in the four weeks to March 1 (during February). Those who worked more than 20 hours a week will be eligible for the higher tier of payments, while those who worked fewer than 20 hours a week will qualify for the lower tier.

However, similar to the first phase of JobKeeper, the ATO will have discretion over eligibility requirements, and this will include cases where an employee’s hours were “not usual” during the February reference period.

“For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February 2020,” Treasury says.

This is likely to take the form of an alternative test.

I accessed JobKeeper through an alternative test, will this be available under the extension?

Short answer: yes.

Existing turnover tests will continue to apply, specifically for circumstances where the 2019 comparison period is not appropriate for a specific business.

Essentially, if September quarter revenue in 2019 is not an appropriate comparison period, because perhaps your business was not operating in 2019, alternative test provisions will remain open.

Where can I learn more?

Treasury has published new fact sheets explaining JobKeeper 2.0, which are available online here.

NOW READ: JobKeeper 2.0: Wage subsidies reduced but extended until March 2021

NOW READ: JobKeeper changes: What we know about the ‘second phase’ of wage subsidies

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