JobKeeper changes: What’s new in JobKeeper 2.0?

JobKeeper to be extended to 28 March 2021

On 21 July 2020, the Government announced that due to the ongoing COVID-19 crisis, the JobKeeper Payment scheme will be extended by six months until 28 March 2021, from the original end date of 27 September 2020. The period of the extended scheme comprises 13 fortnights — i.e. the proposed extension doubles the length of the original scheme.

From 28 September 2020:

  • a two-tier payment rate will apply based on the worker’s average weekly work hours in February 2020;
  • the current $1,500 per fortnight payment rate will be reduced on 28 September 2020 and reduced further on 4 January 2021;
  • the decline in turnover will be retested on a quarterly basis; and
  • the decline in turnover test will be based on actual GST turnover.

The proposed changes to the scheme will be brought into legal effect once the Treasurer registers a Legislative Instrument to amend and/or supplement the Legislative Instrument titled the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020

The proposed extension of the scheme is expected to cost an additional $16.6 billion.

Reference — Treasury fact sheet

The Treasury fact sheet (the Fact Sheet) titled Extension of the JobKeeper Payment is available here:

Treasury review

On 21 July 2020, the Treasury also released its findings from its three-month review of the JobKeeper scheme, which it completed in June 2020. The report concludes that there is a ‘strong case’ to continue the scheme beyond 27 September 2020 and recommends some changes.

Reference — JobKeeper review report

The report titled JobKeeper Payment: Three-month review is available here:

The current JobKeeper rules

For an overview of the existing JobKeeper scheme rules that were announced on 30 March 2020 and the changes which have taken effect since then, refer to our previous Banter Blog articles:

Some terminology

The following terminology is used in this article for ease of reference as follows:

  • the currently enacted JobKeeper scheme period — Monday 30 March 2020 to Sunday 27 September 2020 — is referred to as the ‘ current scheme’;
  • the proposed extended JobKeeper scheme period — Monday 28 September 2020 to Sunday 28 March 2021 — is referred to as the ‘extended scheme’;
  • a reference to an employee or a worker (who is eligible for JobKeeper) includes a reference to a business participant and a religious practitioner (who is eligible for JobKeeper);
  • a reference to a business or an employer (which is eligible for JobKeeper) includes a reference to a not-for-profit entity and a religious institution (which is eligible for JobKeeper);
  • a reference to the 30 per cent decline in turnover test (for most businesses) includes a reference to the 50 per cent decline in turnover test (for businesses with annual turnover exceeding $1 billion) and the 15 per cent decline in turnover test (for not-for-profit entities).

The proposed changes to the JobKeeper scheme

The proposed amendments to the operation of the JobKeeper scheme are outlined below. Other features of the current scheme will remain the same for the extended scheme.

Payment rates

Current scheme

The payment rate — i.e. the minimum amount which an eligible employer must pay an eligible employee, and the amount which the ATO pays the employer per eligible employee — is $1,500 per fortnight. This is a flat rate regardless of the employee’s work hours at any time.

Extended scheme

The payment rate will be reduced in two tranches as follows:

The eligibility criteria for the full rate and the partial rate are explained below.

Note: Businesses will be required to nominate which payment rate they are claiming.

Categories of employees — hours worked in February 2020

Current scheme

There is no distinction between full-time, part-time, fixed term, long-term casual or stood down employees for the purposes of the minimum payment. Every eligible employee is entitled to the minimum payment of $1,500 per fortnight regardless of the number of hours worked at any time.

An employee must have been employed (other than as a casual, excluding a long-term casual) by the business on 1 March 2020.

A business participant must have been actively engaged in the business on 1 March 2020.

Extended scheme

The two-tier payment system will apply to workers based on their average weekly work hours in February 2020 as follows:

The Fact Sheet does not mention whether religious practitioners will be similarly subject to the 20 hours per week (average) in February 2020 test — this is presumably the case.


Under the current scheme, the requirement for an employee to have been employed on 1 March 2020 and for a business participant to have been actively engaged in the business on 1 March 2020 does not include a minimum number of hours of the employment or active engagement.

Employees whose work hours decreased to from at least 20 hours per week (average) to less than 20 hours per week after February 2020 due to the COVID-19 crisis —including those who were stood down — will still remain entitled to the full payment rate regardless of the hours they actually work in a fortnight from 28 September 2020.

Business participants who, pre-March 2020, worked in their business for less than 20 hours per week (average) but have since increased their active participation due to the crisis will not qualify for the full payment rate regardless of how many hours they work in their business from 28 September 2020.

Eligibility criterion — decline in turnover test

Current scheme

The decline in turnover test operates by comparing the business’:

The turnover test period may be:

  • calendar month from March 2020 to September 2020 (inclusive); or
  • the June 2020 or September 2020 quarter

The relevant comparison period is the corresponding month or quarter in 2019.

The business’s turnover must have decreased by the requisite percentage — i.e. 15, 30 or 50 per cent — between the comparison period and the turnover test period.

The Commissioner has exercised his discretion to establish an alternative decline in

turnover test where there is not an appropriate relevant comparison period.

Extended scheme

The proposed new decline in turnover test will operate as follows:


From 28 September 2020, businesses will no longer be able to test for eligibility using

projected (i.e. estimated) GST turnover or to choose a calendar month as a test period.

Assessing decline in turnover based on activity statements

Businesses will generally be able to assess eligibility based on details reported in their Business Activity Statement (BAS).

The deadline to lodge the September BAS is due in late October, and the December BAS is due in late January (monthly) or late February (quarterly). Therefore businesses will need to assess their JobKeeper eligibility in advance of the BAS deadline in order to meet the wage condition.

The Commissioner’s discretion

There are a number of matters in respect of which the Commissioner will have discretion in relation to the ATO’s administration of the extended scheme:

  • The Commissioner will have the discretion to set out alternative tests where a worker’s hours were not usual during the February 2020 reference period — e.g. where the employee was on leave, volunteering in the bushfire effort, or not employed for the whole period.
  • The ATO will provide guidance where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances.
  • The Commissioner will have the discretion to set out alternative tests in circumstances where it is not appropriate to compare actual GST turnover in a quarter in 2020 with actual GST turnover in the comparative quarter in 2019.
  • The Commissioner will have discretion to extend the time for meeting the wage condition so that businesses have time to first confirm their JobKeeper eligibility. 5/7At time of writing the ATO has not released any guidance on how it will administer the proposed extended scheme.

Case study — extended scheme

This example has been extracted from the Fact Sheet.

Retesting turnover

Carmen owns and runs the City Café. Carmen started claiming the JobKeeper Payment for her eligible staff and herself as a business participant when the JobKeeper Payment commenced on 30 March 2020. At the time, Carmen estimated that the projected GST turnover for City Café in April 2020 would be 70 per cent below its actual GST turnover in April 2019. To be eligible for the JobKeeper Payment from 30 March 2020 to 27 September 2020, Carmen needed to show the turnover for the City Café was estimated to decline by at least 30 per cent.

As a monthly BAS lodger, Carmen submitted her BAS for the City Café in April, May and June. For each of these, her actual turnover was as follows:

From July to September, actual turnover improved as follows:

The actual turnover decline for both the June and September 2020 quarters was still greater than 30 per cent, so City Café was eligible for the JobKeeper Payment for the period of 28 September 2020 to 3 January 2021.

Business continued to improve for the City Café, and actual turnover for the December 2020 quarter was 20 per cent less than the December 2019 quarter, so the City Cafe was no longer eligible to claim the JobKeeper for the second extension period starting from 4 January 2021.

Working out the payment rate

Carmen also needs to calculate how much to claim for each of her staff, and for herself as a business participant.

Carmen — business participant

As Carmen was working full-time at the café herself throughout February 2020, she is entitled to claim $1,200 per fortnight from 28 September 2020 to 3 January 2021, as an eligible business participant.

She has three full-time employees who are also eligible to be paid $1,200 per fortnight because they each worked 20 hours or more per week throughout February 2020.

Chris — part-time

Carmen has an employee, Chris, who works part-time with different hours every other week: 14 hours one week; and 22 hours the next week. During the two pay fortnights prior to 1 March 2020, Chris was employed for 36 hours in each fortnight. On average, Chris worked less than 20 hours per week for City Café. Carmen is eligible to claim $750 per fortnight for Chris, from 28 September 2020 to 3 January 2021.

Cathy — long-term casual — less than 20 hours per week

Cathy is an eligible employee who worked on a long-term casual basis during February 2020. To determine what rate of JobKeeper Payment to claim for Cathy, Carmen looks at pay records for the two fortnightly pay periods before 1 March 2020. She sees that Cathy was employed on average less than 20 hours per week, so Carmen claims $750 per fortnight for Cathy, from 28 September 2020 to 3 January 2021.

Charles — not employed in 1 March 2020

Carmen also started employing Charles from September 2020. Because Charles was not employed at City Café on 1 March 2020, Carmen cannot claim the JobKeeper Payment for Charles.

Further information

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Letty (Tsoi) Chen
Tax Writer / Projects at TaxBanter Pty Ltd
Head Office:
T: 03 9660 3500
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Level 9, 41 Exhibition St, Melbourne, VIC
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Letty Chen

Tax Writer / Projects at TaxBanter Pty Ltd
At TaxBanter, I write technical tax training materials and work on special projects.
Letty Chen

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Letty Chen

At TaxBanter, I write technical tax training materials and work on special projects.