Update 13: Changes to the JobKeeper Rules; new turnover test and reduction of payment rates

To qualify for the original JobKeeper Scheme (JobKeeper 1.0), an employer needed to satisfy the original decline in turnover test, meaning their projected GST turnover for the turnover test period needed to fall short of their current GST turnover for the relevant comparison period, by the required percentage (15%, 30% or 50% depending on the type of entity and size).

To qualify for the JobKeeper payments for the extended JobKeeper scheme (JobKeeper 2.0), an employer needs to satisfy the original decline in turnover test (now extended – see details below) and an additional test. This ensures that employers that qualify for JobKeeper payments under the extended scheme have had a recent actual decline in turnover to ensure that it is appropriately targeted to those businesses still significantly impacted by COVID-19.

The new actual decline in turnover test must be satisfied separately for the two extended periods of JobKeeper 2.0 (28 September 2020 to 3 January 2021, and 4 January 2021 to 28 March 2021) as follows:

• To qualify for JobKeeper fortnights beginning on or after 28 September 2020 and ending on or before 3 January 2021, an employer must demonstrate that their actual GST turnover for the quarter ending 30 September 2020 has declined by the required percentage (15%, 30% or 50%), relative to the comparable quarter in 2019 for this period.
• To qualify for JobKeeper fortnights beginning on or after 4 January 2021 and ending on or before 28 March 2021, demonstrate that their actual GST turnover for the quarter ending 31 December 2020 has declined by the required percentage (15%, 30% or 50%), relative to the comparable quarter in 2019 for this period.

Employers that have already qualified for the JobKeeper scheme prior to 28 September 2020 are not required to apply the original decline in turnover test again (as they have already satisfied the test).

However, employers that have not previously enrolled in the JobKeeper scheme are required to demonstrate that they satisfy both the original decline in turnover test and the new decline in turnover test.

The original decline in turnover test remains the same, except that it allows the additional choice for entities to compare the projected GST turnover in relation to any of the following:

• a calendar month that ends after 30 September 2020 and before 1 January 2021; or
• the quarter ending on 31 December 2020.

Under JobKeeper 1.0, all eligible employees – whether full time, part-time or long-term casuals – were entitled to receive a JobKeeper payment of $1,500 (gross) per fortnight.

However, the new JobKeeper Rules reduce, in two stages, the amount payable for JobKeeper 2.0 from $1,500 to one of two JobKeeper payment rates which depend on the hours the employee works, has paid leave and paid absence on public holidays (see details below).

This two-tiered payment is intended to significantly limit the circumstances in which certain part-time employees or long term casual employees receive a higher amount through the JobKeeper scheme, as compared to their usual wages for their ordinary hours of work prior to COVID 19 impacting their workplace.

The first stage of the reduced rate takes effect from the JobKeeper fortnight beginning on or after 28 September 2020 (and ending on or before 3 January 2021) and the second stage takes effect from the JobKeeper fortnight beginning on or after 4 January 2021 (and ending on or before 28 March 2021).

The two-tiered JobKeeper payment for the two extension periods is set out in the table below (in gross amounts):

Reference periods

To determine the appropriate JobKeeper amount, there are two reference periods that include the 28-day period ending at the end of the most recent pay cycle for the employee that ended before 1 March 2020 or 1 July 2020.

All employees will be assessed based on their hours of work (see further comments below) in the reference period that is the most beneficial to the employee – that is, their payment rate for JobKeeper 2.0 will be assessed based on their hours worked (including paid absences for leave or public holidays) in the 28 day period before either 1 March 2020 or 1 July 2020 – whichever is greater. Employers do not have discretion to choose the applicable reference period – they must use the reference period that results in the employee receiving the higher rate of JobKeeper payment.

For example, if an employee that was eligible for JobKeeper from 1 March 2020 only worked 20 hours in February, but worked 80 hours in June, the employer must nominate the payment rate based on June’s hours (being the most beneficial reference period). Therefore, the employee will be entitled to receive $1,200 per fortnight from 28 September 2020 to 3 January 2021. If the employer continues to qualify in the second extension period, the employee will be entitled to receive $1,000 per fortnight from 4 January 2021 to 28 March 2021.

There is no further testing of the hours of work from the JobKeeper fortnight beginning on or after 4 January 2021 to determine the rate of JobKeeper payments – employees are only tested once.

What is included towards the hours of work in the reference period?

The new Rules have confirmed an employer’s entitlement in relation to the two different JobKeeper payment rates is determined by reference to the actual hours the employee worked, and any hours for which they received paid leave (e.g. annual, long service, sick, carers and other forms of paid leave) or paid absence for public holidays. That is, any paid leave or paid absences for public holidays must also be included when calculating the total number of hours for the purposes of the 80-hour test.

Employers must notify the ATO of the rate for which their eligible employees are entitled to receive JobKeeper payments.  If an employer does not notify the ATO if the higher or lower rate of JobKeeper payment applies in respect of their employee for a JobKeeper fortnight beginning on or after 28 September 2020 then the employer is not eligible for JobKeeper payments in respect of this period until a valid notification (if any) is made.

Employers must also notify their eligible employees in writing within seven days of advising the ATO of the JobKeeper payment rate that applies to the individual. This provides eligible employees with an opportunity to check the appropriate payment rate has been applied, and if not, to have the matter examined by the Fair Work Commission.

Employers currently receiving JobKeeper payments under JobKeeper 1.0 must apply the new actual decline in turnover test to ascertain whether they will be eligible for JobKeeper fortnights on or after 28 September 2020.

Employers who did not choose to enrol in JobKeeper 1.0 may choose to enrol in JobKeeper 2.0. In order to qualify for JobKeeper 2.0, these employers must satisfy both the original decline in turnover test and the new actual decline in turnover test. They must also comply with all the requirements of JobKeeper 1.0 including issuing Employee Nomination Notices to staff.

All employers who qualify for JobKeeper 2.0 need to determine the number of hours that each eligible employee worked in the 28 day period ending at the end of the most recent pay cycle before either 1 March 2020 or 1 July 2020 (whichever is greater) and ascertain the appropriate JobKeeper payment rate for each extension period.