JobKeeper – Second Phase

The Federal Government has now released the rules that will govern the second phase of the JobKeeper Payment program, which will operate from 28 September 2020 through to 28 March 2021. The six-month extension will be broken up in to two quarterly periods, Extension Period 1 and Extension Period 2. In order to remain eligible for the JobKeeper Payment from 28 September 2020, businesses will have to meet a further decline in turnover test.


The following aspects of the program remain unchanged in the second phase:

  • The decline in turnover thresholds for businesses, being that turnover has fallen by 30%, or 50% for entities turning over in excess of $1 billion.
  • Employee eligibility, per the updated reference date of 1 July 2020.
  • The requirement to lodge monthly business declarations.
  • Employers cannot claim the subsidy unless they have already paid the employee. With the exception of the first two fortnights within Extension Period 1, where payments can be made by 31 October 2020.


The rules also confirm that entities already enrolled in the program do not have to re-enrol, but they do need to check their continuing eligibility. They do not need to re-assess the eligibility of employees they are already claiming the subsidy for.

Businesses who have not previously accessed the program are still able to enrol and access the second phase should they pass the eligibility criteria.

Second Phase Changes

Businesses should note the following significant changes to the second phase of the program:

  • Eligibility is now to be determined using actual GST turnover figures – the option to use a projection of GST turnover, as in the current program, has been removed. Businesses will also have to use the accounting methodology they employ on their BAS lodgement to determine their GST turnover, and will no longer have the option to choose between the cash or accrual methods.
  • An alternative test may apply to businesses without an appropriate prior year comparison period. These tests may apply to businesses that:

    • Started after the comparison period started but before 1 March 2020.
    • Undertook an acquisition or disposal that changes the entity’s turnover.
    • Undertook a restructure that changed the entity’s turnover.
    • Derived a substantial increase in turnover.
    • Were affected by drought or natural disaster.
    • Have an irregular turnover.
    • Are a sole trader or small partnership that experienced sickness, injury or leave.
  • Further information on the alternative tests can be found here.

    Please note that amounts received under the JobKeeper Payment program are not included in GST turnover, so are excluded when determining eligibility.

  • Entities are now required to determine their continued eligibility by re-applying the turnover test for both Extension Period 1 (28 September 2020 to 3 January 2021) and Extension Period 2 (4 January 2021 to 28 March 2021).
  • The program will now have two tiers of payment rates, based on the number of hours worked by employees during certain periods. Both tiers are a reduction on the existing $1,500 per fortnight subsidy amount.
    • The ‘Tier 1’ rate will be $1,200 in Extension Period 1, and $1,000 in Extension Period 2, per fortnight.
    • The ‘Tier 2’ rate will be $750 in Extension Period 1, and $650 in Extension Period 2, per fortnight.
    • The ‘Tier 1’ rate applies eligible employees who were working for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and eligible business participants actively engaged in the business for 80 hours or more in February 2020.
    • The ‘Tier 2’ rate applies to all other eligible employees and business participants.

Please note that amounts received under the JobKeeper Payment program are not included in GST turnover, so are excluded when determining eligibility.

Eligible employees and business participants must be notified of which payment rate they are entitled to under the program.

Next Steps for Businesses

Businesses currently enrolled and receiving the JobKeeper Payment should be aware that as the first phase of the program ends on 27 September 2020, payments made to employees after this date will only attract the subsidy if they qualify for the next phase of the program, Extension Period 1. We recommend businesses determine their eligibility for this next phase before making any ‘top up’ payments to employees after 27 September 2020. Given the potentially complex eligibility criteria, this may impact on pay schedules and we recommend this be communicated to employees where relevant.

The introduction of the tiered payment rate adds another layer of complexity to the program. Eligible businesses should begin the process of determining which rate will apply to each of their eligible employees, to ensure they are being paid at least the minimum correct amount under the rate applicable from 28 September 2020. The ATO has allowed businesses until 31 October 2020 to make the required payments for the first two fortnights within Extension Period 1.


Should you need assistance with this or any other aspect of the JobKeeper program, please do not hesitate to contact your Morrows advisor.

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