JobKeeper Round 2

22 July 2020

After weeks of uncertainty about the future of the JobKeeper and JobSeeker emergency payments, the Morrison government has announced that it will extend the schemes for a further six months (13 fortnights), but both schemes will be reduced after a Treasury review foresees such subsidies in the current form could act as disincentives to work as the economy recovers. 

The extension of the schemes postpones the looming September JobKeeper cliff, which is good news for many businesses particularly those that are also relying on other stimulus measures such a rent deferrals and insolvency protection which are also set to expire.

The JobKeeper scheme has also been tweaked to ensure that businesses can continually prove that they are still being impacted by the COVID-19 pandemic.

The key points from these announcements are:

  • The JobKeeper scheme is to be extended a further six months to 28 March 2021;
  • Fortnightly JobKeeper payments to be reduced;
  • New rates will apply to part-time and casual employees;
  • Eligibility for the scheme is to be retested after September 2020 and in January 2021;
  • No sectoral targeting is proposed;
  • Business participants who are not employees remain eligible on the same basis as employees;
  • Employers must pay employees first before they can receive JobKeeper; and
  • No immediate effect of announced changes.


In response to a distortion of wage relativities between lower and higher-paid jobs, the government will adopt two payment tiers that more closely reflect the incomes of those who previously worked fewer hours.

Businesses and not-for-profits will be required to nominate which payment rate they are claiming for each of their eligible employees (or business participants).


Under the original scheme, eligibility was established as a once only test with affected businesses required to demonstrate a decline in turnover of 15%, 30% or 50% depending the nature of the business and its size.  Accordingly, once businesses qualified for the scheme, they could access the JobKeeper payments for the full six months in some cases, regardless of whether turnover was reestablished or improved.

From 28 September 2020, businesses and not-for-profits will still be required to demonstrate that they meet the required decline in turnover (i.e. 30% for businesses with turnovers of $1 billion or less, 50% for those businesses with turnover of $1 billion or more, and 15% for ACNC registered charities). 

However, businesses will be now required to assess their eligibility by reference to their actual June and September 2020 quarter turnovers (as opposed to their projected GST turnover) to demonstrate they have suffered an ongoing significant decline in turnover.

Businesses will need to demonstrate they have experienced the relevant decline in turnover in both of those quarters to be eligible for the JobKeeper payment in the December 2020 quarter.

Employers will also need to reassess their eligibility in December 2020 to qualify for the payment in the March 2021 quarter and will be required to demonstrate that they have met a decline in turnover in each of the previous three quarters ending on 31 December 2020.


The Commissioner will have discretion to set out alternative tests that would establish eligibility 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, in line with the Commissioner’s existing discretion.


The eligibility rules for employees remain unchanged. The self-employed will be eligible to receive the JobKeeper Payment where they meet the relevant turnover test and are not a permanent employee of another employer.

The scheme will continue to operate via the ATO, with payments made to employers in arrears. Employers must continue to satisfy the “wage condition” by making payments to employees equal to, or greater than, the amount of the JobKeeper Payment (before tax), based on the payment rate that applies to each employee.


The government has stated that the changes to the rate and eligibility of the extended JobKeeper program would not be implemented immediately, with businesses and their advisers given time (several months) to digest and adjust to the new announcements.


As the deadline to lodge a BAS for the September quarter or month is on 28 October 2020, and the December quarter (or month) BAS deadline is on 28 January 2021 for monthly lodgers or 28  February 2021 for quarterly lodgers, businesses and not-for-profits will need to assess their eligibility for JobKeeper in advance of these BAS deadlines in order to meet the wage condition (which requires them to pay their eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO).

The Commissioner 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 the JobKeeper Payment.

Alternative arrangements will be put in place for businesses and not-for-profits that are not required to lodge a BAS (eg if the entity is a member of a GST group).


As planned, JobSeeker payments will continue at the current rate until the end of September 2020 and then will be extended until December 2020 at a lower amount.


Today’s announcements come amongst recent reports of thousands of sole traders being advised by the ATO that their JobKeeper applications are being reviewed and that they may lose access to their payments and be required to repay wage subsidies.

These reports serve as a reminder that the ATO will be closely scrutinizing eligibility and declaration forms to ensure that businesses receiving JobKeeper payments are:

  • eligible in relation to their business income (i.e. meet the decline in turnover test);
  • claiming payments for eligible employees;
  • making correct claims; and
  • not manipulating their turnover to satisfy the turnover test.

ATO audits have established that many new businesses may have enrolled in the scheme under the basic turnover test and not the alternative turnover test which was subsequently rolled out by the government for those businesses that have been trading for less than 12 months.

Where the ATO finds that a business has incorrectly enrolled for the scheme, the ATO has the ability to demand repayment and apply penalties, noting however that the ATO has stated that it will not seek to apply penalties to those  businesses that have made genuine mistakes on their JobKeeper applications.


  • We remind you that eligibility to the current JobKeeper scheme may still be assessed until 27 September 2020 and we can assist you to consider and document your eligibility.
  • Look out in particular for the long term casuals test. There are two test times:
    • 1 March 2020 being the date on which the employee has to meet the criteria; and
    • The JobKeeper fortnight where the employer must have paid the employee to be eligible for a claim in that fortnight.
  • As is the case now, employees who join a business after 1 March 2020 are not eligible and eligible employees must be a current employee in the relevant fortnight.
  • Stay tuned for more Cooper Partners alerts regarding the new eligibility tests that are set to apply from 28 September 2020.


If you would like to discuss any matters in this newsletter in further detail, please do not hesitate to contact your Cooper Partners Engagement Team.

This newsletter is current as of 22 July 2020, however, please note that announcements and changes are being made by the Government and the ATO regularly, and we expect that the tax and business-related responses will continue to evolve.  Before acting upon the content of this newsletter, please contact us to discuss how the above applies to your specific circumstances.