JOBKEEPER EXTENDED: How can this assist churches and not-for-profits struggling financially?

Jobkeeper Extended

On the 21st of July 2020, the government announced proposed changes to the JobKeeper Scheme in exercising its power under section 20 of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020. The proposed changes are to extend JobKeeper until 28 March 2021 for businesses and organisations that continue to be affected by the Coronavirus.

As Queensland is adapting to the new changes in Stage 3, churches are beginning to gather live once again – subject to the 4m2 social distancing rules. Despite this, churches and other not-for-profits organisations may continue to rely on Jobkeeper as it experiences an ongoing decline in turnover. With the extension of JobKeeper, a question arises as to whether and how this can assist churches and other not-for-profits experiencing financial difficulties into the future.

ELIGIBILITY OF EMPLOYER

The church or not-for-profit organization must firstly be an eligible employer for the extension. Whether they are an eligible employer will be dependent upon its actual decline in turnover in the ‘relevant periods’. The relevant period for assessment will be dependent upon the period in which the organization wishes to be eligible for. 

Payment period 1 – 28 September 2020 to 3 January 2021

An organisation will be eligible for JobKeeper payments in the first payment period if it has experienced a decline in turnover in both the quarters ending on 30 June and 30 September 2020.[1]

Payment period 2 – 4 January 2021 to 28 March 2021

An organisation will be eligible for JobKeeper payments in the second payment period if it has experienced a decline in turnover in all quarters ending 30 June 2020, 30 September 2020, and 31 December 2020.

Note that the Commissioner of Taxation retains the discretion to set out alternative tests in order to establish eligibility in circumstances where the use of actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019 is not appropriate.

PAYMENT RATES:

The new payment rates are subject to two factors: (a) the number of hours an employee was working in the four weeks before 1 March 2020; and (b) the period of payment.

Payment period 1 – 28 September 2020 to 3 January 2021

For the first payment period, payments will be given to eligible employees accordingly:

  • $1,200 per fortnight to employees who were working in the church or not-for-profit for 20 hours of more a week on average;[2] and
  • $750 per fortnight for eligible employees who were working in the organization for less than 20 hours a week on average.

Payment period 2 – 4 January 2021 to 28 March 2021

For the second payment period, payments will be given to eligible employees accordingly:

  • $1,000 per fortnight to employees who were working for 20 hours of more a week on average; and
  • $650 per fortnight for employees who were working in the organization for less than 20 hours a week on average.

OTHER ISSUES

What if an employee’s hours were irregular during February 2020?

If an employee’s hours were irregular during February – in the 4 weeks prior to 1 March 2020 – the Commissioner of Taxation may set out alternative tests to determine relevant requirements. This may include employees who were on leave etc.

Do these changes affect the eligibility prior to 28 September 2020?

The JobKeeper Scheme will continue to remain open to new recipients, provided they meet the existing eligibility requirements. The rules for eligibility to qualify for JobKeeper remains unchanged.[3]


[1] The decline in turnover threshold remains the same: 15% reduction for Churches and Not-For-Profits registered under ACNC; and 30% reduction for non ACNC Churches and Not-For-Profits with a turnover of $1 billion or less, in comparison with the turnover for the same period in the prior year. 

[2] These are calculated based on the four weeks of pay period before 1 March 2020.

[3] See: https://www.corneyandlind.com.au/employment-law/jobkeeper-churches-covid-19/ for more information on the existing eligibility requirements.

This article was written by James Tan & Ervin Hii (student placement)


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