Technical Update:

Amendments to JobKeeper program and extensions for enrolment and payment for first two fortnights

27 April 2020

On 24 April 2020, the Government announced amendments to its JobKeeper payments scheme to address unintended consequences and to clarify the operation of the scheme. The ATO also registered a legislative instrument to facilitate the alternative test for fall in turnover for several classes of entities where there is no appropriate relevant comparison period. Refer to this BDO Tax Technical Update for detail on the amendments and this BDO Tax Technical Update for detail on the alternative tests.

Proposed amendments

On 24 April 2020, the Federal Treasurer issued a media release with proposed amendments to the JobKeeper payments scheme. A legislative instrument was also registered confirming that an amendment to the Treasury rules will take place to give effect to these amendments. To ensure the integrity and the efficient operation of the JobKeeper payments scheme, the Government is clarifying the operation of the rules as follows.

Special purpose entities/service entities

Changes will address the circumstances where business structures use a special purpose service entity to employ staff and provide employee labour to other group members. The Treasury Rules will be amended to provide for an alternate decline in turnover test for these special purpose entities, where they have not met the basic test for decline in turnover.

This alternate test will apply where an entity provides the services of its employees to one or more related entities, where those related entities carry on a business deriving revenue from unrelated third parties. The alternate test will be by reference to the combined GST turnovers of the related entities using the services of the employer entity.

In effect, employer entities have a choice of measuring their decline in turnover using:

  • Their own turnover from the provision of employees to related entities; or
  • Combined GST turnovers of the related entities using the services of the employer entity.

Multiple operating entities in a group, each with their own employees, will continue to be able to apply the basic turnover test. However, multiple operating entities with either a shared employer entity or their own respective employer entities may now be able to apply the new alternative test by aggregating their GST turnovers for the purposes of satisfying the decline in turnover tests.

Full time students aged 16 and 17 years old

The rules will be amended so that full time students who are 17 years old and younger, and who are not financially independent, are not eligible for JobKeeper payments. This clarification will apply prospectively, so that eligible employers that have already met the wage condition of paying such an employee $1,500 for a fortnight could be entitled to a JobKeeper payments in arrears for that fortnight.

Under the current rules, an eligible employee must be aged 16 years or over.  In the absence of this amendment, 16 and 17 year old casuals who were still at school were eligible for the payment.

This integrity measure confirms the original intention of the rules as outlined in the explanatory statement … “applying the benefit of the JobKeeper payment to workers over the age of 16 only is justified and rationally connected and proportionate to the objective as it is workers over the age of 16 who are financially independent and who require the security provided by participation in the JobKeeper scheme and the maintenance of the working relationship that it affords.”

Charities and religious practitioners

Changes will allow charities (other than schools and universities) delivering significant services that are funded by government to elect to exclude government revenue from the JobKeeper payments scheme turnover test.

This will allow employing charities receiving revenue from government to use either their total turnover, or their turnover excluding government revenue, for the purposes of assessing eligibility for JobKeeper payments. These entities were experiencing difficulty in estimating their projected GST as there was uncertainty surrounding the amount and timing of certain government payments.

The JobKeeper payments scheme will also be extended to allow payments to be made to religious institutions in respect of religious practitioners (with the exception of those who are students only), recognising that many religious practitioners are not ‘employees’ of their religious institutions.

International Aid Organisations

Changes will allow entities that are endorsed under the Overseas Aid Gift Deductibility Scheme or for developed country relief to meet the requirement that not-for-profits pursue their objectives principally in Australia. The current requirement that employees must be Australian residents to be eligible under the JobKeeper payments scheme would remain in place.


Changes will clarify that the core Commonwealth Government financial assistance provided to universities will be included in the JobKeeper payments scheme turnover tests.

Eligible employees once nominated, must be covered

The proposed changes confirm the ‘one in, all in’ principle outlined in the explanatory statement to the existing rules. Once an employer decides to participate in the JobKeeper payments scheme and their eligible employees have agreed to be nominated by the employer, the employer must ensure that all of these eligible employees are covered by their participation in the scheme. This includes all eligible employees who are undertaking work for the employer or have been stood down. The employer cannot select which eligible employees will participate in the scheme.

Extension of time to enrol and pay

The ATO has also extended the time to enrol for the initial JobKeeper periods from 30 April 2020 until 31 May 2020. If employers enrol by 31 May 2020, they will still be able to claim for the first two fortnights (30 March – 12 April, 13 April – 26 April) provided they meet all the eligibility requirements for each of those fortnights including having paid their employees by the appropriate date for each fortnight. Employers can still enrol and claim for JobKeeper payments earlier if they choose.

For the first two fortnights, the ATO will also accept the minimum $1,500 payment for each fortnight even if they have been paid late, provided they have been paid by 8 May 2020.

If employees are not paid by 8 May, employers will not be able to claim JobKeeper for the first two fortnights. This extension date allows more time for employers to consider their circumstances and pay staff and still be eligible for those payments. 

BDO Comment

Contact BDO for assistance with determining eligibility for JobKeeper payments scheme payments including:

  • assessing entity eligibility including performing turnover calculations;
  • assessing employee eligibility and identifying eligible employees;
  • enrolment with the ATO;
  • ongoing payroll and ATO reporting requirements;
  • reconfirming the eligibility of employees; and
  • reconciling JobKeeper payments received to initial claims.

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