Technical Update:

Legislative instruments on JobKeeper extension

23 September 2020

The Federal Treasurer has registered a legislative instrument to allow the extension of the JobKeeper payments scheme through to 28 March 2021 and the Australian Taxation Office (ATO) has registered three related legislative instruments.

Previously announced changes

This instrument was registered on 15 September 2020 by the Treasurer and codifies previously announced changes to extend the JobKeeper rules through to 28 March 2021. Employees hired as at 1 July 2020 will be eligible to the JobKeeper extension.  This is in addition to employees who were eligible to the first round of JobKeeper.

Eligibility for JobKeeper fortnights beginning on or after 28 September 2020 will be subject to a new additional eligibility test for decline in turnover based on recent actual decline in turnover for the applicable quarter relative to the comparable quarter in 2019.

After 28 September 2020, the rate of JobKeeper payment is going to be split and dependent on the hours of work an employee works, whether or not they have paid leave and are entitled to paid absence on public holidays as follows:

Hours worked

28 September 2020 to 3 January 2021 (per fortnight)

4 January 2021 to 28 March 2021 (per fortnight)

80 hours or more in 4-week period



Less than 80 hours in 4-week period



Refer to this previous BDO Tax Technical Update for more detail on the JobKeeper extension.

Actual decline in GST turnover test

This ATO instrument issued on 16 September 2020 sets out the method for determining when supplies are treated as being made at a time during the test period when calculating an entity's current GST turnover for JobKeeper purposes. Firstly, supplies that are not taxable are treated as being taxable in order to allocate these supplies to a test period to the same extent any GST payable on taxable supplies would be attributable to a tax period. This means GST-free supplies, supplies made by entities that are not registered or required to be registered for GST, and supplies that are made between GST group members can also be allocated to a test period – despite not being taxable supplies.

Secondly, the attribution rules are deemed to apply to the supply by the entity even if the entity is not an entity that is subject to the attribution rules under the GST Act. For example, an entity that is a member of a GST group is required to calculate their current GST turnover as if they were not part of a GST group, and unless they are the GST group representative, would not be the entity reporting GST payable on their GST return.

The instrument also sets out the basis of accounting that an entity is required to use (i.e. either a cash basis or non-cash basis).  This ensures that entities use a consistent accounting method for each relevant period in working out their actual decline in turnover.

Alternative reference periods

This ATO instrument issued on 16 September 2020 sets out four alternative reference periods for specified classes of individuals in determining whether the higher or lower JobKeeper payment rate. The standard reference period for an eligible employee is the 28-day period ending at the end of the most recent pay cycle for the employee for the entity to end before either, 1 March 2020, or 1 July 2020.

The four alternative reference periods are as follows:

  1. the employee’s paid hours were less than 80 in both reference periods, and neither was representative of the employee’s typical paid hours
  2. the employee was not in employment with the employer for the whole of the reference period
  3. the employee’s first pay cycle with the employer ended after 1 March 2020, or 1 July 2020 respectively, or
  4. the employee was only deemed for JobKeeper purposes to have been employed by the employer at 1 March 2020 or 1 July 2020 (for example because of a takeover or restructure that has occurred since that date).

Payment rate when hours not ascertainable

This ATO instrument issued on 16 September 2020 sets out when the higher JobKeeper rate applies to an eligible employee of a JobKeeper registered entity, identifying the specific circumstances in which the ATO will be satisfied that determining an employee's total hours is not readily ascertainable.

There are three situations where the higher rate will apply.

  • First, the higher rate applies to employees if, in a reference period, the sum of the eligible amounts totalled $1,500 or more in respect of a particular employee.
  • Second, the Tier 1 rate applies to employees if a written industrial award, employment contract or similar instrument governs their employment relationship and under that agreement an employee was required to work 80 hours or more in a reference period. The example in the explanatory statement involves an employer's payroll records being corrupted and/or lost.
  • Third, the Tier 1 rate applies to employees if it can be determined, based on reasonable assumptions, that an employee's hours in a reference period were 80 hours or more. For assumptions to be "reasonable", they must be based on "verifiable information".

BDO Comment

Employers should read the new legislative instruments carefully, particularly with respect to the requirement for employers to retest eligibility based on actual decline in turnover to continue to access payments and ensure that all BAS lodgments are up to date. Please reach out to your local BDO contacts for further assistance.