The key component of the Federal Government’s business support package in response to the Coronavirus is the JobKeeper payment.  This payment provides a $1,500 per fortnight, per employee wage subsidy to employers for a period of up to six months.  The estimated cost of this measure is $130 billion.

The JobKeeper legislation was passed by Parliament on 8 April 2020.  The substance of the provisions governing its administration is contained in Rules made by the Treasurer on 9 April 2020.  These Rules will be subject to updating over time as issues arise with the implementation of the JobKeeper scheme.

What are the key eligibility requirements?

  • Business turnover must fall by 30%: In order to be eligible for the payment, the projected turnover of the business must fall by 30% as compared to the same time last year. In order to register for the scheme, a business must self assess that it has had or will have the necessary decline in turnover.  A 50% turnover decline is required for businesses with revenue of $1 billion or more while charities need suffer only a 15% decline in order to be eligible.
  • Each employee must be paid at least $1,500 per fortnight before tax: Each employee in respect of whom an employer receives the subsidy must be paid at least $1,500 per fortnight before tax. This applies even if the employee would normally receive less than $1,500 per fortnight.  In effect, the wages of such a person will increase and the wages of all employees on $1,500 per fortnight or less will be at no cost to the employer (except for on costs).
  • The payment can only be received by one employer for an individual: Only one employer can claim the JobKeeper payment in respect of a person. Where a person works multiple jobs then a choice will need to be made as to which employer receives the subsidy.
  • Employees need to have been engaged as at 1 March 2020. Casuals need to have been engaged for 12 months: The subsidy will be available in respect of employees that were engaged on 1 March 2020.  Casual workers will be eligible provided that they are “long-term casuals” meaning that they had been employed on a regular basis for at least 12 months as at 1 March 2020.  Many employers in the accommodation, food services and retail trade industries will therefore not fully benefit from the subsidy due to a substantial number of their workers being casuals employed for less than 12 months.


Significant actions will soon need to be undertaken if employers are to fully benefit from this regime.

Measuring your turnover decline

As noted above, a business with turnover of less than $1 billion must have its revenue decline by 30% or more to be eligible for the scheme.  The Explanatory Statement to the Rules provides that:

“The basic decline in turnover test works by comparing the projected GST turnover of the entity for a period (the turnover test period with its current GST turnover as calculated for a relevant period (the comparison turnover).  In effect this compares a month or quarter in the period the JobKeeper scheme applies with the corresponding period in 2019.”

Importantly, once an entity has satisfied the decline in turnover test it is not required to retest during the JobKeeper scheme.

A business can choose whether it satisfies the decline in turnover test either by reference to a month or quarter with the first test month being March 2020 and the first test quarter being June 2020.

Accordingly, a business with turnover of less than $1 billion will qualify to obtain the full benefit of JobKeeper where it suffers a 30% decline in turnover under any of the following comparisions:

  • The actual turnover of the month of March or April 2020 as compared with the same month in 2019;
  • The projected turnover of the month of April or May 2020 as at the time the JobKeeper application is lodged as compared with the actual turnover of the same month in 2019; or
  • The projected turnover of the June quarter 2020 as compared with the actual turnover of the June quarter 2019.

Whilst for many businesses, unfortunately, a decline in turnover of more than 30% will be inevitable, for others it will be less clear.  They may anticipate a significant downturn in business but the extent of that downturn will not be known and nor will it be capable of reasonable estimation at the time that a business wishes to apply to participate in JobKeeper.

This becomes problematic where an employee has been kept on because the business anticipates that they will be eligible for JobKeeper and even more problematic where an employee who would normally be paid less than $1,500 per fortnight is topped up to that level in order to meet the threshold requirement that each participating employee is paid at least $1,500 per fortnight.

Where a business does not suffer the requisite drop in turnover based on a comparison of the actual March or April figures and wishes to apply for the scheme from its commencement it will be important to keep evidence substantiating the turnover projections that have been made.

Alternative tests for measuring the decline in turnover of a business were published by the Commissioner of Taxation on 23 April 2020.  These tests potentially apply where a direct comparison with turnover at the same time last year is unavailable or would unreasonably leave a business ineligible for JobKeeper.

Registration and time limits

Employers are required to register their interest to participate in JobKeeper through the ATO website.

The first fortnight for which JobKeeper is available is the fortnight ended 12 April 2020.  In order to access JobSeeker for any fortnight ended 24 May 2020 or earlier, the employer must apply to the ATO by 31 May 2020.  If it only wishes to access JobSeeker from a later time then it must apply to the ATO by the end of the first fortnight for which it wishes to claim the subsidy.

An employer must obtain the consent of employees for whom it wishes to claim the subsidy in advance of lodging an application ie. prior to 31 May 2020 where the full benefit is to be claimed.

Where an employer is receiving the subsidy in respect of an employee then no other employer can receive the subsidy in respect of that person.  Where an employer has a casual employee who also has a full or part time job then they are not eligible to claim JobKeeper in respect of the casual employee.

Where the subsidy is being received in respect of an employee then that person will not be eligible to receive the JobSeeker payment despite potentially being better off in doing so when other benefits attached to the JobSeeker payment are also considered.

Further, where an employee is terminated from an employer who has claimed JobKeeper in respect of that person then no other employer will be able to claim JobKeeper in respect of that individual.

Minimum fortnightly payment

Each employee for whom JobKeeper is claimed must be paid at least $1,500 per fortnight before tax.  This means that where, in the ordinary course, a person would be paid less than $1,500 per fortnight an employer will not be able to claim any JobKeeper payment unless their wages are topped up to $1,500 per fortnight.

Where employees are paid on a monthly pay cycle, payments are allocated to fortnights in a manner that is reasonable.

Where employees have entered into salary sacrifice arrangements, payments made under the salary sacrifice will count towards the $1,500 minimum.

The Commissioner of Taxation has extended the time for paying wages for the first two fortnights of JobKeeper until 8 May 2020.


Employers will not be required to pay superannuation on the top up component of wages paid to reach the $1,500 per fortnight threshold.

Interaction with the Code of Conduct for Commercial Tenancies (the Code)

A prerequisite for tenants being able to rely on the Code released on 7 April 2020 is that they are eligible for the JobKeeper subsidy.  In Victoria, this has been taken a step further as tenants must also participate in JobKeeper to obtain relief.  The Code uses the tenant’s projected drop in revenue as a benchmark for determining the rent relief in the form of abatement and deferral.

It will be important to keep this in mind when compiling evidence to support the anticipated drop in revenue that justifies applying for JobKeeper.

Contact us

Please contact our Commercial Team should you require assistance in respect of these changes or if you have any other queries arising from the impact of Coronavirus on your business.


About the Author

Philip Diviny

A highly regarded tax lawyer with a broad-based tax advisory, tax controversy and international tax practice, Philip works across a variety of industries, including property, infrastructure, agriculture, shipping, chemicals and health.

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