ATO Updates on New JobKeeper Arrangements

The ATO has released a somewhat dazzling array of new and updated information sheets addressing the changes to JobKeeper.

Actual decline in turnover test

The ATO states that the actual decline in turnover test can be satisfied in two ways, using:

  • the basic test; or
  • the alternative test.

The basic test involves the comparison of actual GST turnover for the relevant comparison periods (eg September 2020 to September 2019). Generally, businesses will use the basic test. The option of an alternative test has been made available for some cases where the normal comparison period is not appropriate – for example, when a business has been operating for less than a year (although there are other instances where an alternative test can be used). The ATO will issue guidance on the alternative test “soon”.

There is also a modified basic test for group employer labour entities. This refers to those entities that supply employee services to members of consolidated or consolidatable group, or GST groups.

The ATO states that the actual decline test is similar to the “original” decline in turnover test (ie based on projected turnover), except that:

  • it must be used for specific quarters only;
  • actual sales made in the relevant quarter must be used, not projected sales, when working out GST turnover; and
  • sales must be allocated to the relevant quarter in the same way a business would report those sales to a particular BAS (if registered for GST).

Decline in turnover tests

The ATO states that existing participants (ie those enrolled in JobKeeper before 28 September) have already satisfied the original decline in turnover test, and do not need to satisfy it again. They do, however, need to satisfy the actual decline in turnover test.

New participants (ie those enrolling from 28 September) also need to satisfy the actual decline in turnover test. Although they need to satisfy the original decline in turnover test, they will satisfy it if they satisfy the actual decline in turnover test – and they can enrol on that basis.

The ATO advises employers unable to claim JobKeeper that they should notify their eligible employees. Employees should also be advised that the employer is no longer obligated to pay them the amount equivalent to JobKeeper. Those employees will not be eligible to be nominated for JobKeeper by any other entity.

There is no obligation to do monthly reporting during extension period in which an employer is not eligible to receive JobKeeper.

JobKeeper key dates

For the JobKeeper fortnights starting 28 September 2020 and 12 October 2020 only, the ATO is allowing employers until 31 October 2020 to meet the wage condition for all employees included in the JobKeeper scheme.

In addition, to claim payment for the September JobKeeper fortnights, employers must have enrolled by 30 September.

80-hour threshold for employees

The ATO states that a full-time employee who has been employed for their full 28-day reference period will usually satisfy the 80-hour threshold.

However, closer examination may be required for eligible employees who are:

  • part-time;
  • long-term casual;
  • not paid on an hourly basis; and/or
  • stood down.

If an employee has been stood down, an alternative reference period may apply to them.

Any overtime performed by an employee in the course of their employment in their 28-day reference period will count towards the 80-hour threshold. It is the actual hours of overtime performed that count; that is, if a penalty rate loading applies, it does not increase the number of hours counted.

It does not matter if an eligible employee takes their leave at full pay or half pay, or through a purchased leave arrangement. The employer must still count the total number of hours covered by the leave taken. For example, if an employee takes eight hours of annual leave at half pay, the employer counts eight hours towards their 80-hour threshold, not four (full pay) hours.

Unpaid leave is not counted towards the 80-hour threshold. However, if an employee takes unpaid leave, an alternative reference period may apply.

An employee only needs to satisfy the 80-hour threshold in one of the 28-day reference periods. If they satisfy it in one reference period, the employer does not need to determine if they satisfy it in other reference periods.

For employers who have a 30-day pay cycle, the 80-hour requirement equates to 85.72 hours. For a 31-day pay cycle, the equivalent is 88.58 hours.

Employers should use the most accurate workplace records to show the actual hours eligible employees worked in their 28-day reference period. Employers can use their employment records (e.g. payroll data or timesheets) to help determine whether employees satisfy the 80-hour threshold.

Eligible employees

Employers cannot claim for employees who:

  • were first employed after 1 July 2020;
  • left employment before 1 July 2020 (except in limited circumstances);
  • have been, or have agreed to be, nominated by another employer (except in limited circumstances); or
  • are casual employees, unless they were employed by the employer on a regular and systematic basis during the 12-month period that ended 1 July 2020.

If employees have multiple employers, they can usually choose which employer they want to be nominated by. However, if employees are long-term casuals and have other permanent employment, they must choose their permanent employer. They can’t be nominated for the JobKeeper payment by more than one employer.

Employers must also have given a JobKeeper employee nomination notice to any additional employees who first become eligible on or after 3 August 2020 using the 1 July test. This should have been given to any newly eligible employees by 24 August 2020. If not already done, the ATO says it should be done as soon as possible.


Important: Clients should not act solely on the basis of the material contained in Client Alert. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Client Alert is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.


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