Guide to JobKeeper Payment coronavirus stimulus: Eligibility and how to apply
In the wake of COVID-10 the ATO's JobKeeper wage subsidies can help businesses that have suffered a downturn. Here's everything you need to know.
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JobKeeper changes: Response to Victoria's second wave
The arrival of a second wave of COVID-19 in Victoria has forced the Australian government into another tweak to its JobKeeper Payment plan. With Stage 4 restrictions in effect, the eligibility criteria for JobKeeper – nationwide, not just in Victoria – has been loosened. All the changes that come into effect in late September, as detailed below, will remain. However, there are two key amendments.
- Businesses will no longer need to show the required turnover reduction for a combined Q2 and Q3 (when compared to Q2 and Q3 of 2019), just Q3.
- Employees hired before 1 July 2020 are now eligible, where it was previously 1 March 2020.
These tweaks consider thWe updated to include altered rules for JobKeeper eligibility introduced in August 2020at many businesses may have started to come back to normality between the two COVID waves. Perhaps even hired new staff. However, they're now back in trouble and need eligibility to reflect this exact moment in time.
Original plan changes
On 21 July 2020, Australian prime minister Scott Morrison announced a new strategy moving forward for JobKeeper Payments. It comes in the wake of a second wave of COVID-19 cases, primarily through Victoria and New South Wales. The initial plan was for JobKeeper Payments to stop on 30 September 2020, and when Australia's coronavirus recovery was beating expectations, the government intimated it might even bring that forward.
This second wave has put the kibosh on that. Instead, and in support of the calls being made by industry, JobKeeper Payments will extend into 2021. However, they will extend with diminishing returns to businesses looking to keep their staff employed.
|JobKeeper Payment||Working < 20hr/week||Working > 20hr/week|
|1 March to 30 September 2020||$1,500/fortnight||$1,500/fortnight|
|1 October to 31 December 2020||$1,200/fortnight||$750/fortnight|
|1 January to 31 March 2021||$1,000/fortnight||$650/fortnight|
"JobSeeker and JobKeeper are payments that support people's incomes but are not designed to prevent them from going out and seeking work." - Australian prime minister, Scott Morrison
What's in this guide?
- JobKeeper changes: Response to Victoria's second wave
- JobKeeper ended for childcare sector
- The origins of JobKeeper
- What is the JobKeeper Payment program?
- Which employees are eligible for JobKeeper Payments?
- Are New Zealanders eligible for JobKeeper Payments?
- What to do if you're not eligible for JobKeeper Payments
- Which employers are eligible to claim JobKeeper Payments wage subsidies?
- Employer JobKeeper Payment eligibility checklist
- JobKeeper Payment turnover test details
- How does JobKeeper work with new businesses less than 12-months old?
- Single Touch Payroll (STP) app and JobKeeper
- Understanding the JobKeeper top-up process
- JobKeeper and Superannuation
- Can you apply for JobKeeper Payments if you're self-employed?
- JobKeeper and Partnerships, Trusts and Companies
- How to apply for JobKeeper Payments?
- How long will JobKeeper Payments last?
- Can you be paid more than the $1,500 JobKeeper Payment rate?
- Can you get a JobKeeper Payment, a JobSeeker payment and a Coronavirus Supplement?
- Is the JobKeeper Payment plan part of Centrelink?
IMPORTANT UPDATE: The end date for businesses to register their intent to claim JobKeeper payments has passed. It ended on 31 May 2020. The government has also signalled its intent to re-evaluate the ongoing need for JobKeeper in the wake of a faster-than-expected COVID-19 recovery.
JobKeeper ended for childcare sector
As mentioned, the first sector to see an end to JobKeeper payments is childcare. Instead of the original 30 September 2020 end date, JobKeeper payments will no longer be made to childcare businesses who are subsidising their employees from 20 July 2020.
In addition, parents will no longer get access to free childcare - or childcare fully subsidised by the government - from 12 July 2020. But parents and workers aren't been totally left in the lurch.
Starting 13 July 2020, a new $708 million, three-month support package will begin, ending 27 September 2020. As part of this package, childcare workers are guaranteed they'll continue at their employment level throughout the period.
Meanwhile, for parents the previous Child Care Subsidy will be reinstated, albeit with a relaxation of both the eligibility requirements and the activity test. Up to 100-hours a fortnight can be claimed under this subsidy.
The origins of JobKeeper
On 30 March 2020, prime minister Scott Morrison announced a $130 billion stimulus package designed to help employers keep employees on their books even if they've shut down. It's called the JobKeeper Payment program and it will provide wage subsidies for up to six months for companies that are suffering.
As of May 2020, approximately 835,000 businesses and 5.5 million workers were benefiting from JobKeeper. To help meet the demand, the Australian government has released more detailed eligbility guidelines to make the journey more clear for businesses. We have updated this guide where applicable.
Below you will find an overview of everything you need to know about JobKeeper Payments. We highly recommend you also visit our coronavirus hub page, which links out to dozens of helpful guides. From homeschooling to dealing with mortgage payments, lowering household bills, buying toilet paper and more.
Note: If you are an employer be aware that the first half of this article is written for employees primarily.
JobKeeper vs JobSeeker
There has been some confusion betweek JobKeeper and JobSeeker payments. JobKeeper payments are eligible to businesses, not individuals. It's goal is to enable a business that has suffered a significant downturn to retain its employees by claiming a wage subsidy. That subsidy is called JobKeeper. If you are getting JobKeeper payments through your employer, then you are considered employed.
The JobSeeker Payments are for people who have lost their job or had a significant reduction in wages from an employer not eligible for JobKeeper Payments. If this is you, then you should read our JobSeeker guide.
Note: You cannot receive JobKeeper and JobSeeker, so if you need to let the ATO know if are already receiving one and intend to apply for the other.
What is the JobKeeper Payment program?
The nuts and bolts of the JobKeeper Payment program is that the Australian government will provide an employer with a $1,500/fortnight reimbursement for each eligible employee it keeps on its books during the COVID-19 outbreak. The goal is for employers to retain an employment relationship during coronavirus closures and restrictions so they can:
- Take the load off Centrelink
- Help businesses quickly get back up to speed on the other side of the pandemic
The JobKeeper Payment will subsidise their wage during a period of turnover decline. Both the employer and employee must be eligible (see details further below). The business is expected to pass that full $1,500/fortnight subsidy on to each eligible employee, even if they didn't previously earn that amount.
Which employees are eligible for JobKeeper Payments?
The first critical assessment is whether or not you were in an employment relationship with your employer as of 1 March 2020. If that is a "yes" then you must also be over 16 years of age. If that is also a "yes" then you must then tick one of the following boxes.
- You were/are full-time
- You were/are part-time
- Or you were/are a casual worker (working for that employer for at least 12 months)
If the answer is still "yes" you're in luck. You should start a conversation with your employer about topping up your wage (see table below) or request to be brought back onto the books if you've been stood down.
It's worth noting that most, but not all, workers in Australia are automatically eligible even if they tick all the above requirements. The last JobKeeper Payments checklist to look over is below. You must be one of the following.
- An Australian citizen
- The holder of a permanent visa
- A Protected Special Category Visa Holder
- A Non-Protected Special Category Visa Holder (who has been in Australia for over 10 years)
- Or a Special Category (Subclass 444) Visa Holder
Note: People with a Temporary Visa are not eligible.
If your employer is eligible to claim the JobKeeper Payment then the Australian government could subsidise your wage. If the claim is successful and they bring you back onto the books, the government will pay $1,500 of your fortnightly wage without incurring any direct cost to your employer's business.
Before you ask, no, you cannot receive JobKeeper Payments from more than one employer.
Are New Zealanders eligible for JobKeeper Payments?
Yes! Whereas the Centrelink welfare payments are limited in their availability to New Zealanders, the JobKeeper Payment is not. If you are a New Zealander with a Subclass 444 Special Category Visa – the standard temporary visa to live in Australia indefinitely – you're also eligible for JobKeeper. At least, if you meet the full-time, part-time or year-long casual worker markers detailed above.
What to do if you're not eligible for JobKeeper Payments
If you or your employer isn't eligible for JobKeeper Payments, then you need to look at JobSeeker Payments or other welfare benefits from Centrelink. We have an extensive guide to Centrelink during coronavirus that will help you through that.
Our coronavirus hub page is updated daily and has guides on what you need to know including:
- Guide to mortgage repayment help
- Emergency money help
- How to prepare your finances for a recession
- What to do if you've lost your job
- How to dip into your superannuation early
Other ways to save money:
Our complete guide on managing your money during this stressful time has identified how you could save up to $700 a month by making some simple changes.
Not eligible for payments? A high-interest savings account could help you
High-interest savers could be a good option if you're relying on your emergency savings now or anticipate you might soon be. You'll earn interest on the money in the account, and it's not locked away meaning you'll also have the flexibility of accessing it when you need to.
Which employers are eligible to claim JobKeeper Payments wage subsidies?
For a business to be eligible to claim the JobKeeper Payments, it must tick one of these boxes, which are self-assessed:
- For a company with a turnover of less than $1 billion, it must have suffered a 30% or more downturn in the previous month compared to the same month in 2019.
- A company with a turnover above $1 billion must have suffered a 50% or more downturn in the previous month compared to the same month in 2019.
- Is not subject to the Major Bank Levy (which only impacts the major banks).
Note: It's currently unclear what approach you need to take if your business hasn't been in operation for a year, or was in its early – as in, small turnover – stage in early 2019. However, if you start comparing March's turnover to your previous months of operation this will no doubt be your first required step.
It's also worth noting if your business has been forced to close to adhere to lockdown requirements – for example, a gym or beauty salon – then proving your turnover will drop the 30% is going to be pretty straightforward.
If eligible, an employer can begin bringing staff back onto its books immediately. You can not offer JobKeeper Payments to an ex-employee you've stood down since 1 March 2020; you must rehire them first. The first JobKeeper Payment wage subsidies will not land until the start of May, however, they will be backdated to 30 March or to when a staff member has been re-engaged.
Businesses in the context of the JobKeeper Payments include
- Sole Traders
- Self-employed (see more details below)
- Not for profit entities, including charities
Employer JobKeeper Payment eligibility checklist
Here's a breakdown for employers looking to make use of the JobKeeper Payments program from the ATO.
- Self-assess that you have or will have a turnover decline that meets the 30% (businesses under $1 billion turnover) or 50% (businesses above $1 billion turnover) threshold.
- Provide a list of all eligible employees (see checklist above on eligibility) as of 1 March 2020. This list should include any stood down or rehired. Using that list, the ATO can access and populate their details in their system.
- Notify all employees that you have claimed JobKeeper Payments and that they will receive them.
- Pass on at least $1,500/fortnight (before tax) to the eligible employees. Note the "top-up" guidelines listed in the next section.
- Send the ATO a monthly update for at least six months updating the number of eligible employees and any significant changes in turnover.
JobKeeper Payment turnover test details
The main eligibility requirement for JobKeeper Payments is proving that your turnover has dropped the required amount; which is 30% for most businesses. The JobKeeper turnover test is self-assessed and the expectation is that your will be able to prove that the GST you've withheld through March or April 2020 is 30% less than what it was in March or April 2019.
You can also offer to compare the April to June quarter for 2020 against 2019. It's self-assessed, so you can project your expected income if you already know the impact coronavirus will have on your business.
Here are the five basic steps you need to take to pass the turnover test. You will need to present answers to each step to the ATO as part of your application.
- Identify which turnover test period you're looking at; monthly or quarterly.
- Confirm the comparison period you're looking at (likely the same month from 2019).
- Determine what GST turnover figure you're providing; actual or projected.
- Establish what turnover reduction you are required to meet; 30% or 50% (unless you're a charity.)
- Show how steps 1 through 3 show that your turnover meets that requirement identified in step 4.
Note: If you own more than one business, the GST turnover that you must look at for the test is the combined GST. There are many other more niche points to note depending on your situation, so it's worth having a look over the rules at the ATO.
How does JobKeeper work with new businesses less than 12-months old?
If you're a new business or one that was in its infancy a year ago, you're probably wondering where the turnover test leaves you. Obviously, a year ago your turnover would have been non-existent or minor. So even if you're seeing a big decline in turnover, you have no comparative period to test against.
The good news is that the Australian government is aware of this problem. The bad news is they've yet to address it. We're told this will be addressed shortly, however, and as soon as it is we'll update this page with the process.
Single Touch Payroll (STP) app and JobKeeper
Employers that already work with the ATO approved Single Touch Payroll (STP) app have an easier process to follow. Just update the app and JobKeeper will be added to its functionality. Then you can easily identify the employees you have that are eligible for JobKeeper directly and the process will be frictionless.
If you don't use the app, each employee's tax file number and date of birth will need to be lodged manually with the ATO fortnightly.
Understanding the JobKeeper top-up process
It's early days for the JobKeeper Payment plan and it was no doubt rushed through to meet the needs of the community as soon as possible. As a result, there is some challenging language to navigate in the official documentation. Not to mention some discrepancies in what you will find on the ATO website and in government press releases; no doubt these are being ironed out.
As such, this is our interpretation of the information and should be taken as such. There are four broad types of employee an employer will need to manage in handing out JobKeeper Payments.
|Type of employee||JobKeeper top-up requirements|
|Employee is currently earning less than $1,500/fortnight||You are expected to continue paying the agreed wage, then to top it up to $1,500/fortnight. They can then claim that $1,500 back as a JobKeeper Payment. For example; Jane was earning $800/fortnight. Her effective wage remains the same (in terms of superannuation), but she will now be paid $1,500 fortnight.|
|Your employee is currently earning $1,500/fortnight||Nothing changes. You pass on the full $1,500/fortnight payment directly to your employee.|
|Your employee is earning more than $1,500/fortnight||JobKeeper pays $1,500/fortnight of the wage, while the employer tops up the rest. For example, Jill earns $2,000/fortnight, so the employer passes on the JobKeeper wage subsidy and then adds a $500/fortnight top-up payment.|
|An employee was stood down||The employer can reopen an employment relationship with that employee and pay them a temporary wage of $1,500/fortnight for up to six months, which will be reimbursed via JobKeeper.|
Note: JobKeeper Payments effectively work on a cashback style system. The employer is expected to pay the amount in advance, which is then credited back to the business by the ATO.
JobKeeper and Superannuation
If your employer is using the JobKeeper Payment to top-up a fortnightly payment for their employee to meet the minimum payment of $1,500/fortnight, they are not obliged to pay superannuation on that JobKeeper Payment. In the above example, where Jane's wage is topped-up to $1,500/fortnight through a $700/fortnight from JobKeeper, there's no onus on the employer to pay superannuation on the full amount.
However, the employer can if they choose to do so. So for example an employee called Jane can count on getting superannuation on the $800/fortnight she was already receiving, but her employer can choose to exclude the $700/fortnight JobKeeper Payment from their superannuation calculations.
Can you apply for JobKeeper Payments if you're self-employed?
Yes, you can! You can follow the same how to apply for JobKeeper steps listed in the next section. You will also need to provide ongoing monthly updates to the ATO and also have suffered, or be expecting to suffer, at least a 30% income drop. If successful in your claim, payments will arrive once a month for a period of up to six months.
The checklist for self-employed workers applying for JobKeeper Payments is as follows.
- Must have an ABN for their business
- Must nominate an individual to receive the payments
- Will need to provide that individual's Tax File Number (TFN)
- Provide a declaration of recent business activities
JobKeeper and Partnerships, Trusts and Companies
There's an important eligibility requirement to note with certain types of businesses. Only one working director, partner, beneficiary or shareholder can receive JobKeeper payments, not all those involved.
In particular, this can really impact smaller Partnerships. For example, a family business where husband and wife work together. Unfortunately, only one individual will be eligible for JobKeeper, regardless of the decline in turnover. Any employees of the Partnership, however, can be considered for JobKeeper.
How to apply for JobKeeper Payments?
If you're an employer that is eligible to receive JobKeeper Payments, then you should register your interest in the program with the ATO. The Australian government will then pass you the information you need to get started shortly thereafter. That will come in the form of an online application.
If you are an employee, then it's in the hands of your employer – or former employer in most cases – to register the company's intent to claim the JobKeeper Payments. Though it would no doubt be in your best interests to signal to them that you want your job back.
How long will JobKeeper Payments last?
For up to 6 months, running from 30 March through to approximately 1 October. An official end date to that six-month window was not given, so read that as our own speculation.
Can you be paid more than the $1,500 JobKeeper Payment rate?
Yes, you can. This is a wage subsidy program. If your employer meets the aforementioned requirements, and you, the employee, are on their books, then they should receive a $1,500 wage subsidy from the Australian government. This is the minimum you will get.
Whether or not you will receive more than $1,500/fortnight comes down to your relationship with your employer. For example, let's say you were on $2,000/fortnight prior to COVID-19 and have had your hours reduced so that you are now receiving $1,000/fortnight. Assuming each stakeholders' eligibility is ok, your employer will receive a $1,500/fortnight subsidy that they must pass on.
In this situation, you would definitely receive at least $1,500/fortnight. However, it is possible that your employer could return you to full hours and your $2,000/fortnight rate as the cost to them would only be an additional $500/fortnight. That's for the two of you to negotiate.
It's important to note that regardless of skill, experience and previous income, the JobKeeper wage subsidy will be a flat, $1,500/fortnight rate.
Can you get a JobKeeper Payment, a JobSeeker payment and a Coronavirus Supplement?
No, you can't. The JobKeeper program is there to take the load off Centrelink and to keep you employed until we're through the coronavirus pandemic and businesses can reopen and start trading again. If your workplace is eligible and sending you $1,500/fortnight then you are employed. Furthermore, you're earning more than the threshold to be eligible for JobSeeker Payments, Youth Allowance or the other Centrelink welfare payments, too.
Therefore, you cannot receive JobKeeper Payments from your employer and get JobSeeker Payments from Centrelink. And since you can get JobSeeker Payments, you're also not eligible for the Coronavirus Supplement.
If that gives you pause, don't let it. Even with the Coronavirus Supplement, you wouldn't get $1,500/fortnight from Centrelink.
Is the JobKeeper Payment plan part of Centrelink?
No, this isn't part of the Centrelink welfare payment plans.
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