JobKeeper 2.0 legislation introduced

The Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020 was introduced into the House of Representatives on 26 August.

It proposes to extend the end date of the JobKeeper scheme from 27 September 2020 to 28 March 2021; amend the tax secrecy provisions to allow tax officers to disclose otherwise protected information relating to JobKeeper; and extend certain provisions of the Fair Work Act implemented to deal with the COVID-19 pandemic.

The Government announced the extension of the end date of the JobKeeper scheme on 21 July 2020 and then made further revisions on 7 August.

Treasury also subsequently updated its fact sheet, Extension of the JobKeeper Payment on 10 August to incorporate the proposed changes. This provides the opportunity to highlight again some aspects of the broad brush changes that will commence on 28 September.


There are 3 key changes to keep in mind in terms of JobKeeper 2.0.

First, the eligibility test is going to change from being a prospective test (based on projected turnover) to a retrospective test (based on actual turnover). This will be done on a quarterly basis for 2 quarters, ie it will require ongoing monitoring and measuring.

Second, payment rates are to be split and reduced.

Third, the reference date for assessing which employees are eligible for the JobKeeper Payment is now 1 July 2020, brought forward from 1 March 2020. This took effect from 3 August, ie it already applies (again, subject to legislation being passed/statutory rules being made). This provides scope for employees who were not eligible for JobKeeper 1.0 to become so (ie even before JobKeeper 2.0 commences). There will therefore be extra work to determine which “new” employees are in fact eligible (and the payment rate that they, and established, employees are entitled to).

It may be observed that there is a lot more administration and detail in JobKeeper 2.0 than there was in JobKeeper 1.0. For example, businesses need to assess/re-assess their eligibility, twice (in October and January). In addition, due to the split rate, employers will need to determine and nominate which payment rate they are claiming for each of their eligible employees. As a result, it should be expected that there will be a lot more work for accountants and advisors.

What stays the same?

Somewhat perversely, it may be worth noting at the outset what will not change from 28 September.

First up, though, businesses do not need to be concerned about any changes for JobKeeper Payments ($1,500 per fortnight) up to and including 27 September (ie for JobKeeper 1.0). Things will carry on unchanged until then.

Under JobKeeper 2.0, the JobKeeper Payment will continue to be made by the ATO to employers in arrears. It will not be paid to employees, ie it will continue to act as a reimbursement to employers for wages they have paid.

The employee test remains exactly the same, except for the test time, ie 1 July 2020 (discussed below).

The turnover decline thresholds remain the same:

  • 50% for those with an aggregated turnover of more than $1 billion;
  • 30% for those with an aggregated turnover of $1 billion or less; or
  • 15% for ACNC-registered charities (excluding schools and universities).

JobKeeper eligibility will continue to apply to all entities in the same way as it currently does. For example, registered religious institutions responsible for religious practitioners will continue to be eligible to receive the JobKeeper Payment provided they meet existing eligibility requirements and the additional turnover tests during the extension period. The treatment is the same for not for profits and the self-employed (“business participants”). (For ease of reference, the terms “businesses” or “employers” will be used.)

The “one-in all-in” principle remains. All eligible employees must continue to be included by the employer in JobKeeper 2.0 – the employer cannot pick and choose (“cherry pick”) employees.

The current monthly reporting requirement will continue.

Retrospective testing of employer eligibility

From 28 September 2020, businesses seeking to claim the JobKeeper Payment will be required to demonstrate that they have suffered a decline in turnover using actual GST turnover (rather than projected GST turnover). There will be 2 test points.

  • In order to be eligible for the first JobKeeper Payment extension period of 28 September 2020 to 3 January 2021, businesses will need to demonstrate that their actual GST turnover has fallen in the September quarter 2020 (July, August, September) relative to a comparable period (generally the corresponding quarter in 2019).
  • In order to be eligible for the second JobKeeper Payment extension period of 4 January 2021 to 28 March 2021, businesses will need to demonstrate that their actual GST turnover has fallen in the December quarter 2020 (October, November, December) relative to a comparable period (generally the corresponding quarter in 2019).

This is set out in tabular form as follows:

JobKeeper periodRelevant BAS (quarterly)BAS compared to
28 Sep 2020 – 3 Jan 2021September 2020September 2019
4 Jan 2021 – 28 Mar 2021December 2020December 2019

The Treasury fact sheet advises that the Commissioner will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019, in line with the Commissioner’s existing discretion.

New registrants and eligibility for JobKeeper 2.0

Businesses can enrol for JobKeeper at any time if their circumstances have changed, eg if they were previously ineligible but now consider that they are (eg Victorian businesses closed due to state of disaster measures). Under JobKeeper 1.0, they can ascertain this by using the basic or alternative test (but must do so by the end of August). For JobKeeper 2.0, they must use the “retrospective” turnover tests discussed above.

The Treasury fact sheet notes that businesses will “generally” be able to assess eligibility based on details reported in BAS. Alternative arrangements will be put in place for businesses that are not required to lodge a BAS (eg, if the entity is a member of a GST group).

It is not specified in the fact sheet as to when businesses must self-assess their eligibility for JobKeeper 2.0, ie the precise date. However, it is implied in the Treasury fact sheet that this must be done before the relevant BAS is due to be lodged. The deadline to lodge a BAS for the September quarter or month is in late October. The December quarter (or month) BAS deadline is in late January for monthly lodgers or late February for quarterly lodgers.

This illustrates a major sticking point. Businesses will need to assess their eligibility for JobKeeper 2.0 – to quote from the fact sheet – “in advance of the BAS deadline in order to meet the wage condition (which requires them to pay their eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO)”. (See above observation about additional work.)

JobKeeper periodBAS lodgment dateSelf-assessment date for JobKeeper eligibility
28 Sep 2020 – 3 Jan 202128 Oct 2020Mid-Oct 2020 (as per Treasury fact sheet)
4 Jan 2021 to 28 Mar 202128 Feb 2021Mid-Jan 2021 (as per Treasury fact sheet)

The Commissioner will have discretion to extend the time an entity has to pay employees in order to meet the wage condition, so that entities have time to first confirm their eligibility for the JobKeeper Payment.

Employee eligibility

There are no changes for employee eligibility in JobKeeper 2.0, other than the reference date of employment moving from 1 March to 1 July 2020. In particular, there are no changes to the rules as they affect casuals, ie they must have been employed on a regular and systematic basis for at least 12 months as at 1 July 2020 and not be a permanent employee of any other employer.

The change in reference date means that there could be a change in the number and make up of employees for whom JobKeeper can be claimed. This will require each business to re-examine their employees and determine their eligibility (as well as the number of hours they work in terms of determining the rate at which JobKeeper will be paid).

For example, new employees engaged since 1 March up to and including 1 July are now eligible for JobKeeper. Casuals who perhaps fell just short of the 12 month threshold on 1 March may now qualify (ie as at 1 July).

It is worth summarising the requirements as they apply to employees generally. Employees are eligible for JobKeeper 2.0 if they:

  • are currently employed by an eligible employer (including if they were stood down or rehired);
  • were (for the eligible employer or another entity in their wholly-owned group) either: (i) a full-time, part-time or fixed-term employee at 1 July 2020; or (ii) a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer;
  • were aged 18 years or older at 1 July 2020 (employees aged 16 or 17 can also qualify if they are independent or not undertaking full time study);
  • were either: (i) an Australian resident (within the meaning of the Social Security Act 1991); or (ii) an Australian resident for tax purposes and the holder of a Subclass 444 (Special Category) visa as at 1 July 2020;
  • were not in receipt of any of these payments during the JobKeeper fortnight: (i) government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010; or (ii) a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work.

Only one employer can claim the JobKeeper Payment in respect of an employee.

The self-employed will be eligible to receive the JobKeeper Payment where they meet the relevant turnover test and are not a permanent employee of another employer.

Employees will continue to receive the JobKeeper Payment through their employer during the period of JobKeeper 2.0 if they and their employer are eligible and their employer is claiming the JobKeeper Payment (albeit at the reduced rates).

Split payment rates

The JobKeeper payment rate ($1,500 per fortnight until 27 September) is to be reduced and paid at 2 rates under JobKeeper 2.0.

PeriodFull rate per fortnightLess than 20hrs worked per fortnight rate
28 Sep 2020 – 3 Jan 2021$1,200$750
4 Jan 2021 – 28 Mar 2021$1,000$650

Phase 1: 28 September 2020 to 3 January 2021

  • Tier 1: $1,200 per fortnight – the payment rate will be $1,200 per fortnight for all eligible employees who, in the 4 weekly pay periods before the reference period, were working in the business for 20 hours or more a week on average (and for business participants who were actively engaged in the business for more than 20 hours per week).
  • Tier 2: $750 per fortnight – the payment rate will be $750 per fortnight for employees who were working in the business for less than 20 hours a week on average and business participants who were actively engaged in the business less than 20 hours per week in the reference period.

Phase 2: 4 January 2021 to 28 March 2021

  • Tier 1: $1,000 per fortnight – from 4 January 2021 to 28 March 2021, the payment rate will be $1,000 per fortnight for all eligible employees who in the 4 weekly pay periods before the reference period, were working for 20 hours or more a week on average (and for business participants who were actively engaged in the business for more than 20 hours per week).
  • Tier 2: $750 per fortnight – the payment rate will be and $650 per fortnight for employees who were working for less than 20 hours a week on average and business participants who were actively engaged in the business for less than 20 hours per week in the reference period.

Calculating average hours worked

Attention should also be paid to how the average hours worked is determined, ie if the employee is under or over the 20 hour threshold.

The reference period for employees regarding their hours worked to determine their tier of payment will be the 2 fortnightly pay periods prior to 1 March 2020 or 1 July 2020. The period with the higher number of hours is to be used for employees who were eligible at 1 March 2020. This means that if an employee was working more than 20 hours per week up to 1 March but was subsequently stood down after that time due to the COVID downturn (but still on the books as an employee and paid wages via JobKeeper), he or she will be eligible to be paid at the higher rate.

Planning can start now

There are a number of things that businesses seeking to receive JobKeeper 2.0 will need to put down on their “to do” list.

First, determine if the business is eligible. This will require self-assessing their actual GST turnover ahead of the usual BAS reporting date of 28 October (in terms of the first JobKeeper 2.0 quarter). The precise date is yet to be advised, but for the moment can be presumed to be 14 October.

Second, determine which employees are eligible, ie if there have been changes in personnel (or their circumstances) since 1 March.

Third, determine what rates of pay eligible employees are entitled to under JobKeeper 2.0. For non-full time employees, this will involve ascertaining average weekly hours worked (ie either above or below 20 hours per week). This can be done now.

For those cash-strained enterprises that are heavily reliant on JobKeeper to fund their wage payments, attention should be given to not exceeding the designated payment amounts which will change on 28 September 2020, and again on 4 January 2021. Put bluntly, if businesses continue to pay $1,500 per fortnight per employee in October with the expectation of full reimbursement, they will be in for a rude shock.

Ian has worked at Thomson Reuters for over 15 years as a senior tax analyst with expertise in income tax and GST. He has been involved in tax publishing for over 25 years.

Prior to his tax writing career, Ian worked as a manager for a Big 4 accountancy firm and then with a firm which provided specialist tax advice for the music and recording industry.

Ian holds a Bachelor of Economics degree, is a Chartered Accountant and a registered tax agent. Among other things, Ian is the author of the Australian GST Handbook, the GST Commentary Service, the Australian Financial Planning Handbook and the specialist income tax commentary services, as well as being a regular contributor to the news services.

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