JobKeeper 2.0: What you need to know

Written by Darren McClafferty and Michael Evans.

In a highly anticipated announcement, the Federal Government has today announced the changes to its JobKeeper scheme, which will extend the program by a further six months from 28 September 2020 until 28 March 2021. 

These amendments follow a review conducted by Treasury in June.

Key elements of the extension of JobKeeper

The extension of JobKeeper will:

• retain the same decline in turnover thresholds for certain entities;
• require entities to re-apply the turnover test at various stages of the extended program; and
• have two tiers of payment rates, based on the pre-COVID-19 number of hours worked by employees.

Some unresolved aspects

These include:

• the status of the existing alternative decline in turnover tests made by the Commissioner of Taxation (Commissioner); and
• whether new tests will be made by the Commissioner for the purposes of the extended periods of the program.

Next steps

We will continue to monitor any updates and make appropriate submissions to the relevant authorities.  We would be pleased to work with you in relation to any particular issues or concerns you may have regarding the extended program.

You can read our previous insight from April regarding the introduction of the JobKeeper program here.

What's staying the same?

There are several elements of the JobKeeper program that will remain the same:

• the decline in turnover threshold test, being that turnover has fallen or will likely fall by 50% or 30% (depending on the size of the turnover, and with a separate 15% threshold for certain not-for-profits);
• the status of 'eligible employees', which continue with the business and meet a range of criteria; and
• other requirements, such as the 'wage condition' and record-keeping obligations.

What's different?

Additional turnover tests

The decline in turnover tests will be re-applied at various points of the extended program.  Entities must satisfy these tests to remain eligible. 

These tests will compare actual GST turnover figures, rather than using a projected GST turnover figure like the existing program.

Entities must meet the relevant decline in GST turnover according to the table below to remain eligible:

Like the existing rules, the relevant comparison period will generally be the corresponding quarters in 2019.

Payment rate

The JobKeeper payment will move to a two-tiered system.  It depends on the number of hours worked by an eligible employee in the pre-COVID-19 environment.  The payment rates also differ between the extension periods, as outlined below:

Employers will still be required to pay eligible employees equal to, or greater than, the relevant amount of the JobKeeper payment (before tax).

Some uncertainties under the revised program

There are certain matters which remain unclear following today's announcement.  These include:

• the status of the existing alternative decline in turnover tests made by the Commissioner;
• the scope of the Commissioner's discretion to set out alternative tests in light of the amendments, such as for decline in turnover and employee hours worked in the pre-COVID-19 environment; and
• the continuing reporting requirements for the extended scheme.

These questions will be determined, in part, by amendments made to the JobKeeper rules and announcements made by the Commissioner.  We are monitoring any updates which may provide some clarification. 

As with the existing program, it may also be possible for further variations to be made to the JobKeeper rules as certain issues unfold while the program continues.  It may be the case that certain issues will need to be addressed directly with the Commissioner.