RSM Australia

JobKeeper V2.0 - complexity redefined

Tax Insights

The long-awaited legislative instrument setting out the key amendments to the JobKeeper scheme to take effect from 28 September 2020, dubbed JobKeeper V2.0, has been registered by Treasury. The legislative instrument sets out the changes to the basic turnover test and provides clarification around the two-tiered JobKeeper payment rate.

The Explanatory Statement (ES) to the amended rules indicates the changes have been structured in a way to minimise compliance costs, however, given the unexpected two-stage decline in the turnover test, newly qualified employers may face greater compliance costs when determining eligibility. JobKeeper V2.0

The legislative instrument does not include the amendments to the alternative tests and employers will need for the Commissioner to exercise their powers to:

  • Issue or amend alternative decline in turnover tests;
  • Determine when supplies or classes of supplies should be recognised for the purposes of determining GST turnover;
  • Determine the circumstances under which the higher rate of JobKeeper is taken to apply to an individual (where special circumstances apply or the number of hours worked is not readily ascertainable).

Basic eligibility criteria will continue to apply, meaning the entity claiming JobKeeper must either:

a) have been carrying on a business in Australia;

b) be a not for profit pursuing its objectives principally in Australia or

c) be an eligible deductible gift recipient at 1 March 2020. 

This means that businesses that commenced or changed hands (subject to certain conditions) post 1 March 2020 will not be eligible for the JobKeeper scheme even if they have experienced a significant decline in turnover and have eligible employees at 1 July 2020.

Decline in turnover test turnover test

Under the amended rules, the decline in turnover test will involve a two-step process.
Entities will now be required to satisfy both the decline in turnover test based on projected turnover under the old rules (‘original turnover test’) and the decline in turnover based on an actual turnover test (‘actual turnover test’). Entities currently enrolled in the JobKeeper scheme will only need to satisfy the actual turnover test as they will be deemed to have already satisfied the original turnover test.

Step 1: The entity must pass the original decline in turnover test. Under the basic test, the periods under which an entity can test decline in turnover using the original test include:

  • A calendar month that ends after 30 March 2020 and before 1 October 2020;
  • A calendar month that ends after 30 September 2020 and before 1 January 2021;
  • A quarter ending on 30 June 2020; or
  • The quarter ending on 30 September 2020,
  • The quarter ending on 31 December 2020.

The original turnover test requires the comparison of projected GST turnover for the test period to actual GST turnover for the relative comparison period in the prior year.

Step 2: If the entity satisfies the basic decline in turnover test at Step 1, they must also satisfy the actual test. Under the basic test, the relevant periods for the actual decline in turnover test are:

The actual turnover test requires the comparison of actual GST turnover for the test period to actual GST turnover for the relative comparison period in the prior year.

Under the amended rules an entity who has been enrolled in the JobKeeper scheme will not be prevented from re-entering the scheme if they cease to be eligible in the December 2020 quarter, but subsequently find they satisfy the relevant decline in turnover tests and become re-eligible to claim for the March 2021 quarter.

Two-tiered JobKeeper rate

From 28 September 2020, the rate of JobKeeper an employer can claim in respect of an eligible employee will change to a two-tiered payment rate. The two-tiered JobKeeper rate is summarised below:

The higher of the two-tiered JobKeeper rate is to be determined with respect to the average hours worked by an eligible employee in the applicable reference period, being either 1 March 2020 or 1 July 2020. The eligible employee reference period and test for the higher JobKeeper rate is also summarised below:

Eligible business participant (‘EBP’) – meaning of ‘actively engaged’

The ES to the new rules indicates that if an entity has not been active during the reference period, all duties or other activities were carried on by other employees or the EBP held a separate full-time job, the individual is unlikely to satisfy the ‘actively engaged’ test and will not be eligible to claim an EBP.

Integrity rules apply and entities seeking to claim for an EBP are cautioned that both EBP’s and the entity claiming on their behalf must be in a position to reasonably demonstrate the EBP was ‘actively engaged’ in the business for the required number of hours in February 2020.

Failure to demonstrate the EBP was actively engaged in the business for the required number of hours to claim the higher JobKeeper rate or continuing to claim when the entity should have known the individual was not eligible, may expose both the entity and the EBP to liability for overpayments.

Further updates will be provided as the ATO update guidance or when further legislative instruments are registered.


The amended rules add a new layer of complexity and business owners are strongly encouraged to seek assistance from their accounting or taxation adviser when applying the two-step decline in turnover test. If you require assistance specific to your circumstances, please contact your local RSM office.


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