18 September
JobKeeper 2.0 payment wage subsidy measures announced
The JobKeeper 2.0 Payment scheme has been brought in to subsidise wage payments for eligible businesses affected by the COVID-19 pandemic. The initial payments will comprise of a payment of $1,500 per fortnight, for each eligible employee as at 1 March 2020, for six months (13 fortnights) from 30 March 2020 to 27 September 2020. The scheme has since been extended past September to March 2021. From 28 September 2020, the payment will be reduced to $1,200 per fortnight, and down again to $1,000 per fortnight from 4 January 2021. Eligible businesses can be structured as sole-traders, partnerships, trusts or companies.
Payments will be made by the ATO monthly, in arrears. Payments will be scheduled to end by 28 March 2021.
Eligibility criteria
Payments will be made by the ATO monthly, in arrears.
Qualification for the scheme
For a business to qualify for the first extension of the scheme, it must:
- have at least a 30% reduction in turnover for the September and December 2020 quarters compared to a year ago (50% reduction for businesses greater than $1b in turnover and 15% reduction for registered non-profits and Australian charities). The decline in turnover test changes after September 2020 in the following ways:
- – the business must compare the September 2020 quarter, with the same quarter a year ago in order to qualify for the first extension for September to January payments, and
- – the business must compare the December 2020 quarter with the same quarter a year ago in order to qualify for the second extension for January to March payments.
- not be subject to the Major Bank Levy
- for JobKeeper fortnights from 3 August 2020 onwards, have an employment relationship with employees that existed as at 1 July 2020, and
- confirm that each eligible employee is currently engaged.
For the JobKeeper extension, businesses and non-profits will generally be able to assess eligibility based on the details reported in their Business Activity Statements (BAS). Alternative tests will be introduced for businesses and non-profits that are not required to lodge a BAS.
As the September BAS is lodged by late October, and the December BAS is lodged by late February for quarterly lodgers, businesses and non-profits will need to assess their eligibility for JobKeeper in advance of the BAS deadline. They have to do this in order to meet the wage condition, which requires them to pay their eligible employees in advance of receiving the JobKeeper payments in arrears.
The Commissioner of Taxation 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 JobKeeper Payment.
There is a chance that businesses which do not qualify for JobKeeper in the second extension — January to March 2021 — will receive a payment in February for January’s JobKeeper amount. They will not know that they are ineligible until lodgement of the December BAS on 28 February 2021. We have no further information in regards to this, apart from an acknowledgement that a business may need to repay certain amounts.
Not-for-profit organisations and self-employed individuals will also qualify for the scheme, subject to those entities meeting the decline in turnover test.
Decline in turnover test
The main aspect of the JobKeeper qualification is the decline in turnover test, as most businesses looking to receive JobKeeper Payment employ staff.
Once a business has its turnover for the quarter reduced by 30%, they qualify for the first extension under the decline in turnover test and will have to retest the next quarter in order to qualify for the second extension.
The basic test is a comparison of turnover for the quarter compared to the comparison period of a year earlier. The comparison required for a business to qualify is to compare the current GST turnover (GST Act s 188-15) reported in the last quarter’s BAS with that of the same period in the previous year. That is, comparing September 2020 and December 2020 current GST turnover with that of the corresponding September 2019 and December 2019 quarters.
An alternative test is also available for a business who either has:
- has only commenced operations within the past year, or
- extraordinary circumstances.
In the alternative test, an employer may qualify by being granted an allowance by the ATO.
Self-employed qualification rules
Where a person is self-employed by a business and does not receive a salary, the business may elect an “eligible business participant” for JobKeeper. Only one eligible business participant will receive JobKeeper per entity.
The individual must:
- not be employed by the business
- satisfy business participation requirements, and
- satisfy nomination requirements.
Also, the individual must have a certain role in the entity to qualify, as listed below:
- Sole trader – the individual
- Partnership – a partner
- Trust – an adult beneficiary
- Company – either a director or a shareholder.
Applying for the payment
Once a business self-assesses that they qualify for the scheme, certain criteria is still required to be met in order to receive ongoing JobKeeper payments.
As stated above, the business needs to ensure which employees meet the eligibility requirements to receive the JobKeeper Payment. Exclusions apply to individuals who have been on casual employment for less than 12 months, people under 16 and those without correct residency visas.
All the eligible employees are required to be notified, in writing, that the business is intending to claim the JobKeeper Payment on their behalf. As part of this notice, the employee is required to acknowledge that they will not receive the JobKeeper payments from another employer (if necessary). The notification process includes sending the ATO’s JobKeeper employee nomination notice. This notice is required to be returned to the business before they can claim the JobKeeper amount.
Each employee is required to be paid based on the table below per fortnight (before tax) for each fortnight the business wishes to claim JobKeeper.
The JobKeeper Payment rate
| Period | Criteria | Payment amount |
| Initial phase — 30 March 2020 to 27 September 2020 | All eligible employees or business participants | $1,500 per fortnight |
| First extension — 28 September 2020 to 3 January 2021 | Eligible employees or business participants working for 20 hours or more per week All other eligible employees and business participants | $1,200 per fortnight $750 per fortnight |
| Second extension — 4 January 2021 to 28 March 2021 | Eligible employees or business participants working for 20 hours or more per week All other eligible employees and business participants | $1,000 per fortnight $650 per fortnight |
As noted above, the first fortnight is 30 March 2020 to 12 April 2020. This includes re-hired or re-engaged employees, as per below.
Re-hire/Re-engaging employees
In certain situations, a business may have let go or stood down staff during the month of March at the commencement of COVID-19 restrictions. A critical aspect of the JobKeeper Payment is the continuing relationship between employer and employee.
Therefore, as long as the employee was engaged as an employee at 1 March 2020 for the initial JobKeeper Payment, or at 1 July 2020 for JobKeeper fortnights starting from 3 August 2020, businesses are able to re-hire or re-engage employees in order to pay them JobKeeper Payment. Existing employees who qualify as pre-1 March 2020 hires, do not need to qualify again for the new 1 July 2020 hire date, even if they were let go and hired after 1 July 2020. Please see the table below for more details:
| Date | Status | Qualification |
| As at 1 March 2020 | Permanent employee | Can qualify as an eligible JobKeeper employee for JobKeeper fortnights starting 30 March 2020 Can also qualify as an eligible JobKeeper employee for JobKeeper fortnights starting 3 August 2020 |
| Casual employee | Needs to satisfy the 12-month rule to qualify as an eligible JobKeeper employee for JobKeeper fortnights starting 30 March 2020 If the 12-month rule is satisfied, can also qualify as an eligible JobKeeper employee for JobKeeper fortnights starting 3 August 2020 | |
| As at 1 July 2020 | Permanent employee | Can qualify as an eligible JobKeeper employee for JobKeeper fortnights starting from 3 August 2020 |
| Casual employee | Needs to satisfy the 12-month rule to qualify as an eligible JobKeeper employee for JobKeeper fortnights starting 3 August 2020 |
Note: Rules regarding the Fair Work Act have been amended in relation to these types of arrangements due to the COVID-19 pandemic. In situations where an individual has been made redundant in March, and subsequently re-hired in April, there has been no word from the ATO regarding whether a genuine redundancy occurred for taxation purposes.
The amount of JobKeeper payments from the ATO to the business is based on when the employees were re-hired. Additional arrangements which accompany the JobKeeper rules allow the ATO to treat a particular event as happening in a different fortnight to when it actually happened. This allows the ATO to provide a reasonableness test for employees who were re-hired.
If it is the intention for an employer to re-hire an employee, and they did so after 12 April 2020, being the end of the first fortnight, they may do so without JobKeeper Payment penalty in the second fortnight. This allowance is granted only in the first and second fortnight of the program, where the ATO can decide that a gross payment of $3,000 to an eligible employee in the second fortnight includes backpay for the first fortnight.
JobKeeper initial phase — Enrolment, lodgments and making changes
The enrolment and management process is controlled by the ATO. All businesses should use the Business Portal and myGovID to register for JobKeeper payments. A tax agent can also complete this for clients.
Employers are encouraged to enrol before the end of April to get payments sooner, however the enrolment process is open until the end of May.
On enrolment, each business needs to verify and identify each employee who qualifies and has nominated to receive the JobKeeper payments from the business. This can be completed from pre-filled Single Touch Payroll reports or manual pay reports (for larger employers). Employers not yet on Single Touch Payroll are able to manually enter all the eligible employee details.
Then a confirmation is required that the selected employees are still engaged by the business, and have received the minimum gross payments since 30 March 2020.
Each month, businesses are required to reconfirm that the employees of the business remain eligible. Therefore, businesses are required to make any subsequent changes to the employees details in the event of them leaving or changing employment.
Monthly declarations from August 2020
The ATO has advised changes for businesses making their August declaration, in line with changes from JobKeeper fortnight 10, commencing 3 August 2020. This monthly declaration is due by 14 September 2020.
Employers need to include their new employees, or long-term casuals, who now qualify as at 1 July 2020.
The ATO has also advised that an extension for meeting the wage condition is allowed for these newly eligible employees, to 31 August 2020.
Further actions
One main facet of the JobKeeper Payment is that the amounts paid from the ATO to the business is to be passed on to the employees. As the expense of paying employees for services is a deductible expense, the JobKeeper payments are assessable income of the business.
There are further measures in place within the updated Fair Work Act in order to protect employees. One such measure is allowing businesses to order staff to work fewer hours (including nil hours) in response to the COVID-19 pandemic.
Also, to protect employees a “minimum payment obligation” has been enacted to ensure that employees are compensated on their regular working wage. This means that employees who work less hours than normal, but entitled to earn more than the stated amount per fortnight, receive adequate compensation from their employer.