(Updated 20 August 2020)

On 21 July 2020, the Government announced it will be extending JobKeeper Payments from 28 September until 28 March 2021 with some modifications made to application of Turnover Test and the amounts of payments. Subsequently, on 7 August, the Government announced further changes to the extended JobKeeper rules to extend JobKeeper eligibility to certain employees. On 14 August, the Treasurer issued legislative instrument to give effect to the amendments from 15 August 2020.

Extended Employee Eligibility

The amendments expanded the eligible employee criteria to include employees who commenced employment after 1 March 2020 provided they were eligible employees of the business as at 1 July 2020. The change to the employment reference date takes effect from 3 August.

That means that businesses need to reassess eligibility of employees who commenced working after 1 March and were on the books as full-time, part-time or long-term casual employees at at 1 July 2020 to determine if they are eligible for JobKeeper for the fortnights commencing 3 August 2020. There is no need to retest the existing employees who are already eligible based on 1 March reference date.

It is important to remember that employers need to notify employees, receive back the nomination forms and satisfy wage condition in respect to ALL eligible employees to continue receiving JobKeeper Payments (“one in, all in” principle). Under the original rules, that would need to be done before the end of the fortnight commencing on 3 August 2020 (i.e. by 16 August 2020). However, as the amendments were only legislated on 14 August, the Commissioner has exercised his discretion to allow more time for satisfy the conditions.

Key dates:

24 August 2020:

Employers must provide a nomination notice to employees who are became eligible based on the 1 July 2020 employment date.

31 August 2020 (ATO extended due date):

Employers must satisfy wage condition for ALL eligible employers for the fortnights commencing on 3 August 2020 and 17 August 2020 (fortnight 10 & 11).

Changes to the JobKeeper rules also now allow eligible employers or business participants who were nominated with one entity prior to 1 July 2020 to renominate themselves as employee of another entity. The individuals must have ceased employment with the first entity and commenced employment with the seconded entity by 1 July 2020.

Reduced payments rates for extended JobKeeper periods

From 28 September 2020 to 3 January 2021:

• 1,200 per fortnight for all eligible employees who were working in the business for at least 20 hours a week on average in the four weeks before 1 March 2020, and for Business Participants who were actively engaged in the business for at least 20 hours in the month of February 2020.
• $750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021:

• 1,000 per fortnight for all eligible employees who were working in the business for at least 20 hours a week on average in the four weeks before 1 March 2020, and for Business Participants who were actively engaged in the business for at least 20 hours in the month of February 2020.
• $650 per fortnight for other eligible employees and business participants.

Business will be required to nominate which rate they are claiming for each of their eligible employee and a business participant. The Commissioner will have discretion to set out alternative tests where the working hours were not usual (e.g. employees being on leave, volunteering or not employed for all or part of February). Further guidance will be provided by the ATO.

New Decline in Turnover Test for JobKeeper 2.0

Unlike the original JobKeeper rules, the new turnover test will require to compare the actual turnover for the month rather than a projected turnover.

Further, starting from 28 September 2020. the turnover will need to be retested for each relevant quarter as follows:

From 28 September 2020 to 3 January 2021:

• Businesses will have to demonstrate that their actual GST turnover has declined by at least 30% (or 50% for businesses with an aggregated turnover of more than $1 billion) in September quarter 2020 (July, August, September) quarters, compared to September quarter 2020;

From 4 January 2021 to 28 March 2021:

• Businesses will have to demonstrate that their actual GST turnover has declined by a required percentage in December quarter 2020 quarter (October, November, December), compared to December quarter 2019;

The Commissioner of Taxation can exercise discretion to set out alternative tests that would establish eligibility for extended JobKeeper payments 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.

Assessing decline in turnover for extended JobKeeper

Businesses will generally be able to assess eligibility based on details reported in the Business Activity Statement (BAS). Alternative arrangements will be made for businesses that are not required to lodge a BAS in the periods.

Businesses that lodge their September and December quarter BAS late, will still need to assess their eligibility for extended JobKeeper Payments prior to lodging BAS to determine if the minimum payments will be required to be met (wage condition) from 28 September. The Commissioner of Taxation has discretion to extend the time to pay employees in order to meet the wage condition to give entities an opportunity to confirm their eligibility for the JobKeeper Payment.

The required percentage of decline in turnover test will remain the same for each of the relevant period (15% for eligible charities, 50% for entities with an aggregated turnover of more than $1 billion, and 30% for all other entities). Alternative decline in turnover tests determined by the Commissioner will still be available to certain classes businesses where it is inappropriate to apply the basic test.

Employers will still have to satisfy the wage condition in respect to all eligible employees, which requires to pay an amount in the fortnight that is at least equal to the JobKeeper amount.

More information about JobKeeper payments extension can be found on The Treasury Website.

Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 7) 2020

For original eligibility requirements, other rules and further information about JobKeeper Payments, please refer to our earlier blog posts:

• COVID-19 Response: JobKeeper Payments of $1500 per Fortnight
• JobKeeper Checklist for Businesses (based on original rules)

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