How the JobKeeper extension works


The Federal Government has revealed that they will be prolonging the JobKeeper Payment scheme through to 28 March 2021. This move is designed to assist businesses that continue to be excessively impacted by the coronavirus pandemic.  

JobKeeper Payment 

What is it?

A relief grant from the Government to help businesses critically affected Covid-19.  

It was set into motion on the 28th of September 2020  

What are the conditions?  

  1. Employers need to be able to prove that their actual GST (Goods & Services Tax) turnover falls against a comparable This means that the projected turnover will not be relevant. Here’s an actual decline in turnover test
  2. There are two different extension stages. Each stage has a different JobKeeper payment based on a test of additional actual fall in turnover. 

These extension periods are: 

  1. Starts on the 28th of September 2020 and concludes on the 3rd of January 2021
  2. Starts on the 4th of January 2021 and concludes on the 28th of March 2021

Do the rates of payment change? 

Yes. The rate of payment changes in each extension period. This will be determined by the number of hours: 

  1. An eligible employee works or,
  2. The number of hours that an eligible employee is actively participating in the business

The two rates will be called Tier 1 & Tier 2 

Tier 1 

This rate applies to eligible employees who were actively participating for 80 hours or more in February and can prove it in a declaration. Tier 1 also includes eligible employees who also worked 80 or more hours in the 4 weeks of billable periods before 1 March 2020 or 1 July 2020. 

Tier 2  

Applies to any other employees and active business participants that fit the requirements for the JobKeeper extension.  

These tiers have been put in place to allow employees to reassess their eligibility requirements if they had not done so on the 1st of March 2020.  

JobKeeper extension 1 

The first extension runs from the 28th of September 2020 till the 3rd of January 2021. Businesses that meet the decline in the turnover test for the September 2020 quarter (July, August, & September) will find the JobKeeper payment decreased to: 

Tier 1 – $1200 per fortnight before taxation 

Tier 2 – $750 per fortnight before tax 

JobKeeper extension 2 

Runs from 4 January 2021 till 28 March 2021. Employers and businesses that qualify in the JobKeeper decline in the turnover test for the December 2020 quarter (October, November & December) will find the payment decreased to: 

Tier 1 – $1000 per fortnight before taxation 

Tier 2 – $650 per fortnight before tax 

What stays the same? 

  • The new rules have established that some elements of the JobKeeper program will relatively stay unchanged. Respectively:
  • The status of eligible employees. These stay unchanged if they have continued with the business and satisfy the criteria, inclusive of the new reference date which is the 1st of July 2020
  • Requirements such as record-keeping obligations and the wage condition
  • The decline in the turnover threshold. Of course, this is in the vent that the GST turnover has fallen by 50% or 30% (or potentially will fall).
  • Elections previously made under the JobKeeper scheme also remains the same.

What has changed?

Added turnover tests. The decline in turnover tests needs to be re-applied to remain eligible for both Extension Periods 1 and 2.  

The tests will check the actual GST turnover figures, rather than relying on a ‘projected’ GST turnover amount as before. Refer to the conditions above to remain eligible.  

Payment rate. A two-tiered system has been introduced and it’ll be divided depending on the number of hours that are worked by an eligible employee in a period. Refer above to extension periods. 


What’s STILL unclear? 

A few issues remain ambiguous. For instance, the status of the existing administrative concessions by the Commissioner. This is mostly concerning the figures used for effecting the GST turnover tests. 

The scope of the Commissioner’s discretion to set out complementary tests such as for the decline in turnover and hours employees would’ve worked.  

The status of the existing alternative decline in turnover tests that were made by the Commissioner. 


Your next actionable steps… 

The ATO has recommended a couple of tasks from the 28th of September 2020. You can: 

  • Calculate which payment rate is suitable for each eligible employee
  • Disclose to the Commissioner and eligible employees on which payment rate applies to them.
  • Ensure that the eligible employees are receiving their correct payment rate during the extension periods
  • If registration for GST has been done and there are outstanding BAS statements, then lodge the statements for the 21st of October to December 2020 quarters ASAP (or for equivalent months in case you’re reporting monthly)

We also propose that you begin preparing the important information for submission to the ATO to prove that you’ve gone past the GST turnover test for Extension Period 1. 


Don’t hesitate to book a consultation with us for help in clarifications regarding the extended program and how it affects your business.  

Tradies Accountant