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JobKeeper 2.0: Commissioner’s tests for determining higher or lower payment rate
Technical article

JobKeeper 2.0: Commissioner’s tests for determining higher or lower payment rate

Key take-aways
  • JobKeeper 2.0 commences on 28 September 2020
  • The Commissioner has released legislative instruments that provide alternate rules to enable entities to determine the correct payment rate
  • The maximum payment available will be reduced from 28 September 2020 to $1,200 for the first extension period and $1,000 for the second extension period

The Commissioner has released legislative instruments that provide alternate rules to enable entities to determine the correct payment rate for eligible employees and business participants under JobKeeper 2.0.

Businesses will be required to assess the rate of payment for each employee or business participant based on hours worked (and paid leave) during the relevant period. Whilst the Commissioner’s rules are said to provide flexibility for businesses to consider alternative periods in some cases, their automatic application requires careful consideration of individual circumstances to ensure compliance with the wage condition for JobKeeper and Fair Work purposes.


The maximum payment available under JobKeeper will be reduced from 28 September 2020 to $1,200 for the First Extension Period (being 28 September 2020 to 3 January 2021) and $1,000 for the Second Extension Period (being 4 January 2021 to 28 March 2021). The maximum payment is only available for those eligible employees and business participants that satisfy a work hours test (more than 80 hours in the relevant period), regardless of their hours of employment within the JobKeeper fortnight itself. Employees or business participants that do not satisfy the work hours test will be eligible for the reduced payment rate of $750 (for the First Extension Period) or $650 (for the Second Extension Period).

For an employee, this requires that the total hours of work, paid leave and paid absence on public holidays was 80 hours or more during a relevant 28-day period of pay cycles (“reference period”) prior to either 1 March 2020 or 1 July 2020. For an eligible business participant, this test requires that the individual was actively engaged in the business for at least 80 hours during the month of February 2020.

Further details are available in the JobKeeper 2.0 bulletin see here.

What power does the Commissioner hold?

As part of the extension, the Commissioner was given two powers to make determinations in relation to the payment rate:

  1. The power to determine that another reference period applies to a specified class of individuals if the Commissioner considers that the period is not suitable for that class of individuals
  2. The power to determine other specified circumstances in which the higher rate might apply for a class of individuals, where the Commissioner considers that the hours worked in the reference period are not readily ascertainable. On 16 September 2020, the Commissioner released two determinations exercising these powers

What alternate reference periods will now apply to employees?

The Commissioner has outlined that alternative reference periods will apply to certain individuals where:

  1. The total numbers of hours worked during the reference period was not representative of the number of hours worked in a typical such 28-day period
  2. The individual was not employed for the full reference period (including because the business changed hands)
  3. The employee’s first pay cycle ended after 1 March 2020 (or 1 July 2020)

Where one of these conditions applies, an alternative reference period is available, being the most recent 28-day period that is representative (where the hours were not representative), or (for new employees during that period) the first recent 28-day period ending after 1 March 2020 or 1 July 2020 in which they were not stood down.

Separate conditions apply in relation to determining an alternative reference period for eligible business participants (where the hours actively engaged were not representative, or they were not a shareholder, director or beneficiary for the whole of the month of February 2020).

Do I have to consider the commissioner’s alternate reference periods?

If you determine that an employee did not work more than 80 hours (including paid leave and public holidays) in either of the relevant reference periods (ending 1 March 2020 or 1 July 2020), you should ensure that you consider whether an alternate reference period applies to the individual. Topping up the wages of employees (to the correct amount: higher or lower rate) for each fortnight is a condition of receiving JobKeeper payments, and failure to do so may also expose the employer to significant penalties under the Fair Work Act 2009.

In what other circumstances will the higher rate apply?

Where there are no, or incomplete records of hours worked for an employee (including where remuneration is not tied to hourly or contracted rates such as those whose remuneration is based on commissions), the Commissioner has determined that the higher rate will apply to individuals that meet one of the following conditions:

  1. During the reference period, the employee was paid $1,500 or more (pre-tax), but excluding any top-up amounts paid under JobKeeper 1.0
  2. The employee was required to work more than 80 hours during the reference period under a written industrial award, enterprise agreement or individual employment contract
  3. The hours, while not readily ascertainable, can be determined based on ”reasonable assumptions” to have been more than 80 hours during the reference period.

What are the next steps?

With JobKeeper 2.0 commencing on 28 September 2020, it is important to review your position and consider how the rules apply. Contact your Pitcher Partners representative to determine what action is required.

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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