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29th July, 2020

UPDATED: JobKeeper 2.0 – an accountant’s overview 

JobKeeper wage subsidies will be extended for those who can continue to prove eligibility. But what’s the fine print? In this article, Chartered Accountant Joe Kaleb provides a summary.

The Government announced on 21 July 2020 that, due to the ongoing COVID-19 crisis, the JobKeeper Payment scheme will be extended by six months until 28 March 2021, from its original end date of 27 September 2020.

The existing JobKeeper Payment will remain in place until 27 September 2020. The rules for accessing the payment under existing eligibility requirements remain unchanged for periods up until 27 September 2020, except for the change to the date of employment to 1 July 2020 that determines employee eligibility (see below).

NB: This article has been updated to reflect changes made to JobKeeper 2.0 as announced by the Government on 7 August 2020.

To be eligible for JobKeeper 2.0, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:

  • 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 Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities)

READ: Frequently asked questions about JobKeeper turnover tests

On 7 August 2020, the Government announced adjustments to JobKeeper 2.0 to expand the eligibility criteria in the wake of the tougher COVID-19 restrictions imposed in Victoria. These two changes will apply nationwide and are as follows:

1. Adjustments to employee eligibility

  • From 3 August 2020, the relevant date of employment to determine eligibility has been extended from 1 March 2020 to 1 July 2020. This is designed to increase employee eligibility for both the existing scheme as well as the new extension period from 28 September 2020.
  • Casual employees will still be required to have been employed on a systematic basis for 12 months as is required under the existing scheme.

2. Adjustments to turnover tests

  • For the first extension period from 28 September 2020 to 3 January 2021 (phase 1), businesses and not-for-profits will be required to demonstrate that their actual GST turnover has significantly fallen (using the relevant existing decline in turnover tests) in the September 2020 quarter only relative to the corresponding quarter in 2019.
  • For the second extension period from 4 January 2021 to 28 March 2021 (phase 2), businesses and not-for-profits will be required to demonstrate that their actual GST turnover has significantly fallen (using the relevant existing decline in turnover tests) in the December 2020 quarter only relative to the corresponding quarter in 2019.

Under the rules announced on 21 July 2020, businesses would have been required to demonstrate that their turnover for the first extension period had fallen in both the June and September quarters, and for the second extension period that their turnover had fallen in all of the June, September and December quarters.

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Changes to JobKeeper from 28 September 2020


The following is a summary of the way the current JobKeeper system will be modified, with changes to payments and eligibility requirements after 27 September:

  • A two-tier payment rate will apply based on eligible employees or business participants average weekly work hours in the four weeks of pay periods before either 1 March 2020 or 1 July 2020 — the period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility
  • The current $1,500 per fortnight payment rate will be reduced on 28 September 2020 (phase 1) to a maximum of $1,200 and reduced further on 4 January 2021 (phase 2) to a maximum of $1000
  • Decline in turnover will be retested on a quarterly basis
  • Decline in turnover test will be based on “actual” GST turnover as disclosed on the business activity statements
  • ATO will continue to pay in arrears
  • The requirement for employers to pay employees before receiving JobKeeper payments will continue
  • New recipients can apply for JobKeeper at any time, but existing eligibility rules apply (for example, the business was in existence on 1 March 2020 and there was at least one eligible employee on this date)

Phase 1: 28 September 2020 — 3 January 2021


Eligibility for this phase is based on “actual” GST turnover having fallen in the September 2020 quarter compared to the corresponding quarter in the previous year, per the business activity statements.

Payments will be made in two tiers:

  • Tier 1 – Eligible employees or business participants work an average of 20 hours or more during the 4 weeks prior to 1 March 2020 or 1 July 2020 — paid $1,200 per fortnight.
  • Tier 2 – Eligible employees or business participants work an average of less than 20 hours during the 4 weeks prior to 1 March 2020 or 1 July 2020 – paid $750 per fortnight.

Phase 2: 4 January 2021 — 28 March 2021


In phase 2, eligibility is based on “actual” GST turnover having fallen in the December 2020 quarter compared to the corresponding quarter in the previous year, per the business activity statements.

Payments will be made in two tiers:

  • Tier 1 – Eligible employees or business participants work an average of 20 hours or more during the 4 weeks prior to 1 March 2020 or 1 July 2020 — paid $1,000 per fortnight.
  • Tier 2 – Eligible employees or business participants work an average of less than 20 hours during the 4 weeks prior to 1 March 2020 or 1 July 2020 – paid $650 per fortnight.
SeptemberDecember
QuarterQuarter
2019 Actual Turnover$300,000$300,000
Situation 1
2020 Actual Turnover$175,000$225,000
% fall42%25%
Situation 2
2020 Actual Turnover$225,000$175,000
% fall25% 42%
Example: Retesting turnover for a business with annual turnover <$1bn

Phase 1 eligibility


Situation 1: Your business has suffered a reduction in turnover of at least 30 percent in the September 2020 quarter compared to the previous year = eligible.

Situation 2: Your business has not suffered a reduction in turnover of at least 30 percent in the September 2020 quarter compared to the previous year = ineligible.


Phase 2 eligibility


Situation 1: Your business has not suffered a reduction in turnover of at least 30 percent in the  December 2020 quarter compared to the previous year = ineligible

Situation 2: Your business has suffered a reduction in turnover of at least 30 percent in the December 2020 quarter compared to the previous year = eligible

Please note: As these examples show, there will also be many situations where a business suffers a decline in turnover of more than 30 percent in the September 2020 quarter and as such is entitled to phase 1, but is ineligible for phase 2 as turnover has not fallen by at least 30 percent for the December 2020 quarter compared to the same period last year, and vice versa.


Note: Commissioner’s discretion


The commissioner has the discretion to provide alternative tests where the employee works unusual hours during the February 2020 or June 2020 reference periods — where the employee was on leave, volunteering during the bushfires, or not employed for the whole period.

The commissioner can also provide guidance where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances, as well as set out alternative tests in circumstances where it’s not appropriate to compare actual GST turnover in a quarter in 2020 with actual GST turnover in the comparative quarter in 2019.

Finally, the commissioner may also extend the time to pay wages, so that businesses have time to first confirm their JobKeeper eligibility.


Additional notes


Labour-intensive businesses currently eligible for JobKeeper payments, which may potentially not be eligible from 28 September 2020, will need to plan ahead and assess their ongoing viability — these businesses should consider restructuring and, where possible, automating their operations.

While the JobKeeper Scheme turnover thresholds will remain the same, businesses will need to apply and satisfy them again at the beginning of October 2020, and then again at the beginning of January 2021 — this imposes additional compliance obligations on businesses.

The catch in JobKeeper 2.0 for those seeking the Tier 1 (higher) rate of subsidy is the 20+ worked hours test, determined by looking back to average hours worked in February 2020 or June 2020. This test imposes additional compliance obligations on many businesses, particularly those that have many part-time and casual staff.

Employees that have had their work hours decreased from at least 20 hours per week (average) to less than 20 hours per week after February 2020 or June 2020 will still remain entitled to the full payment rate (Tier 1) regardless of the hours they actually work in a fortnight from 28 September 2020.

The deadline to lodge the September 2020 quarter BAS is due either in late October or late November, and the December 2020 quarter BAS is due in late February 2021 for all businesses. As a result, businesses will need to assess their JobKeeper 2.0 eligibility in advance of the BAS deadline in order to meet the wage condition.

Unfortunately, there is no good news on the JobKeeper front for startup businesses that commenced shortly before the pandemic or even once COVID-19 emerged. These businesses will continue to be ineligible as they generally have no turnover reported on business activity statements.

This article, while written by accredited tax agent, chartered accountant and business advisor, Joe Kaleb, of the small business portal Australianbiz, does not constitute professional advice. For advice on your specific situation, MYOB recommends engaging a qualified professional directly. You can begin looking for an advisor, here.