JobKeeper 2.0 is now law

15 Sep, 2020


Editor’s note

The ATO has subsequently advised that for the JobKeeper fortnights starting 28 September 2020 and 12 October 2020 only, employers will have until 31 October 2020 to meet the wage condition for all employees included in the JobKeeper scheme.

JobKeeper 2.0 — Legislative Instrument registered

On 15 September 2020, the Treasurer registered a Legislative Instrument titled the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020 (the Amendment Rules No. 8), accompanied by an Explanatory Statement, which amends the Legislative Instrument titled the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020.

The Amendment Rules No. 8 give effect to the following changes to the JobKeeper Scheme which were announced on 21 July 2020 and 7 August 2020, being the introduction of:

  • two extensions to the JobKeeper scheme beyond the former end date of 27 September 2020;
  • a two-tier payment rate system;
  • eligibility rules for the two payment tiers based on the number of hours worked during the relevant reference period; and
  • a requirement to re-test a business’s eligibility each quarter based on a new ‘actual decline in turnover test’.

NoteNote – Recent developments

The changes to the JobKeeper scheme

This article provides an overview of the key changes to the JobKeeper Payment scheme introduced by the Amendment Rules No. 8.

Extensions to the JobKeeper scheme

There will be two extensions to the JobKeeper scheme — which was previously legislated to end on Sunday 27 September 2020 — as follows:

Payment rates

From 28 September 2020, the payment rate will be split into a Tier 1 rate (i.e. the higher rate) and a Tier 2 rate (i.e. the lower rate). Further, both Tier 1 and Tier 2 payment rates will be reduced in two tranches as follows:

The payment rates apply to all individuals eligible for JobKeeper payments — i.e.  eligible employees, eligible business participants and eligible religious practitioners.

In this article, a reference to an eligible employee includes a reference to an eligible business participant and an eligible religious practitioner unless stated otherwise. Similarly, a reference to an eligible employer includes a reference to an eligible business (of which the individual is a business participant) and a registered religious institution unless stated otherwise.

How to determine which payment tier applies

The two-tier payment system will apply to each employee based on their total working hours in the applicable ‘reference period’.

The reference period

The reference period for an individual is determined as follows:

An alternative reference period

The Commissioner may determine that an alternative reference period applies to a specified class of individuals where he considers that the relevant reference period set out above may not be suitable.

The payment tiers

The payment tiers will apply as follows:


  • To be eligible for the Tier 1 rate:
    • an employee only needs to satisfy the 80-hour requirement in respect of one reference period where both reference periods (i.e. pre-1 March 2020 and pre-1 July 2020) apply;
    • a business participant must also make a declaration that they had actively engaged in the business for at least 80 hours during the reference period to the entity (or in the case of a sole trader, to the Commissioner); and
    • a religious practitioner must also make a declaration that they had done relevant activities for at least 80 hours during the reference period to the entity.
  • Where the pay cycle for the employee is longer than 28 days, a pro-rata proportion of the total hours of the employee in the pay cycle is to be used.
  • The Commissioner has the discretion to determine specified circumstances in which the higher rate applies to a class of individuals.

The employer’s obligations

The employer must:

  • notify the Commissioner of the payment rate that applies to each individual; and
  • other than a sole trader — notify the individual of the payment rate within seven days of notifying the Commissioner.

The actual decline in turnover test

From 28 September business will need to apply a new actual decline in turnover test in addition to the existing decline in turnover test.

The new ‘actual decline in turnover test’ will operate as follows:

Key differences to the existing decline in turnover test include that:

    • current (i.e. actual) GST turnover is used instead of projected (i.e. estimated) GST turnover; and
    • the test period is a quarter with no option to choose a calendar month.

Commissioner discretion

The Commissioner may determine that certain supplies or classes of supplies are to be treated as being wholly or partly made at a particular time.

The Explanatory Statement notes that it is expected the Commissioner will determine that most or all supplies will be treated as being made at a time in the period to which they are attributable for GST reporting purposes — i.e. it is likely that businesses will generally be able to assess eligibility based on details reported in their Business Activity Statement (BAS).

ATO guidance

At the time of writing, the ATO has not released details of whether and how the Commissioner will exercise his discretionary powers under the Amendment Rules No. 8 or how it intends to administer aspects of the extensions.

The ATO will update its JobKeeper Payment webpages (QC 62125) when more information becomes available. TaxBanter will communicate key developments through our social media channels and through this blog. You can subscribe for updates at the bottom of this page, and follow us on LinkedIn so you don’t miss out!

Upcoming webinar

Upcoming webinar
Interested in learning more about the JobKeeper extensions? Join two of our Senior Tax trainers on Wednesday, 16 September. We’ll cover:

    • JobKeeper 2.0
    • the Fair Work 10 per cent decline in turnover test for legacy employers
    • the tax practitioner’s role in assisting legacy employers
    • and more

You can learn more about JobKeeper Extended here or through the link below.

Stay informed with our newsletter

Join thousands of savvy Australian tax professionals and get our weekly newsletter.