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JobKeeper 2.0: Government extends payment scheme
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JobKeeper 2.0: Government extends payment scheme

The Federal Government has announced the JobKeeper payments scheme will be extended beyond September 2020.

The extended scheme will apply at a top rate of $1,200 per JobKeeper fortnight until 3 January 2021, then dropping to $1,000 until 28 March 2021. Lower rates will apply for part-time and casual employees. Businesses will be required to re-test their eligibility for the payment scheme to access the extension, but those currently receiving JobKeeper for their employees can continue to receive payments until September.


The JobKeeper payments scheme is designed to support eligible Australian businesses and their employees in response to the economic impact of COVID-19. The scheme, which was originally slated for completion in September, will now continue until 28 March 2021 with new eligibility and payment conditions.

Businesses that satisfy the extended eligibility criteria will be entitled to a payment of up to $1,200 for the period 28 September 2020 to 3 January 2021 (the first period) and $1,000 for the period 4 January 2021 to 28 March 2021 (the second period) per eligible employee or business participant. Lower rates will apply for employees or business participants that work reduced hours.

What are the new conditions for eligibility?

Businesses seeking to apply for payments under the extended scheme are required to reassess their eligibility for each of the two payment periods separately. Based on Treasury’s Fact Sheet (see here), this involves satisfying the decline in turnover test based on actual turnover for:

  1. Both the June and September 2020 quarters for the first period
  2. Each of the June, September and December 2020 quarters for the second period

The Commissioner of Taxation will once again have the power to set alternative tests where it is not appropriate to compare the actual turnover in these periods to the relevant comparison period in 2019 (generally the corresponding quarters in 2019).

Is the proposed new test appropriate?

While the new test seeks to ensure only employers who have continuously demonstrated a decline in turnover for the whole of the period are eligible for JobKeeper payments, the method will inadvertently exclude some businesses that still require support under the scheme.

Example: A business may have had a slight pickup in the June quarter due to the relaxation of some COVID-19 restrictions; however, may have a sharp decline in the September quarter. If the June quarter has a decline of 29.5% and the September quarter has a decline of 45%, this entity will not satisfy the requirements (even though it has suffered a decline of greater than 30% in both the six-month period and in the latest quarter).

Pitcher Partners will be making submissions to suggest modifications to the test to make it more appropriate for businesses to determine eligibility.

How is the decline in turnover to be tested?

The Treasury Fact Sheet suggests that the test will be based on a comparison of quarterly periods only and on ‘actual turnover’ for those quarters, regardless of whether the business reports on a monthly or quarterly basis.

It is expected that the methods of calculating actual turnover will continue to mirror those permitted in the ATO’s guidance (including LCR 2020/1). As noted above, an important change in relation to the decline in turnover test is that it will be based on actual turnover during the relevant 2020 period, rather than a projected turnover. Treasury recognises in its Fact Sheet that this will mean employers will need to determine their eligibility prior to lodging activity statements for these periods.

Do I have to have enrolled in JobKeeper prior to September to qualify?

According to the Treasury Fact Sheet, the JobKeeper payment will continue to remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.

What are the new payment rates?

The maximum payment available under JobKeeper will be reduced from 28 September to $1,200 for the first period and $1,000 for the second period. The maximum payment is to be available to eligible employees and business participants who satisfy a work-hour test in the four-week pay period prior to 1 March 2020. In this way, payment rates are set for employees as at 1 March 2020 regardless of their current hours of employment. 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 period) or $650 (for the second period).

Extension period Fortnights 20 hrs or more < 20 hours
First period 7 $8,400 ($1,200*) $5,250 ($750*)
Second period 6 $6,000 ($1,000*) $3,900 ($650*)
Total 13 $14,400 $9,150
*Per fortnight

What is the work-hours test?

The work-hours test requires an employee to have worked more than 20 hours per week on average during the four-week pay period prior to 1 March 2020. Based on the example in the Fact Sheet, this is determined by the number of hours worked in each of the pay periods that fall into the four-week period, rather than hours performed during the four weeks themselves. For business participants, the test requires that they were actively engaged in the business for more than 20 hours during the month of February 2020.

The Commissioner will be given the power to set alternative tests that apply where the hours worked in February 2020 were not “usual” hours (i.e. where the employee was on leave, fighting the bushfires, or was not employed for the whole month).

How will the tests interact with the wage condition?

Employers may need to satisfy the wage condition for some fortnights prior to having finalised their turnover calculations for the relevant period – for example, the first fortnight of 11 October 2020, which require the calculations for the September quarter to be finalised to determine eligibility.

Furthermore, the first week of the first period (i.e. the fortnight ending 11 October 2020) and the second period (i.e. the fortnight ending 17 January 2021) will include days that straddle different minimum wage payments. It may become problematic to calculate whether the wage condition is satisfied in such cases where employees are not paid on a weekly or fortnightly basis. The Treasury Fact Sheet notes that the ATO will release further guidance to assist employers who pay their staff for periods longer than a fortnight.

What about the modified test for employer groups?

The Fact Sheet does not refer to the modified tests for employer groups. It is expected that the provisions will continue to apply to these groups, but further clarification is required.

When will details of the rules be released?

Currently, Treasury has only released details of the extended program in a series of Fact Sheets (see here). It is not clear when amendments to the legislative instrument will be introduced.

What are the next steps?

It is critical for employers to consider their position and how the rules apply. For more information or to review your situation and determine the relevant actions, contact a Pitcher Partners representative.

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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