One of the key changes to the JobKeeper payment for the period 28 September 2020 to 28 March 2021 is the higher and lower payment rates.

An individual is eligible for the higher rate if he or she has worked or was actively engaged for 80 hours or more for a reference period.

Under the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020, the standard reference period means for:

• an eligible employee – the 28-day period at the end of the most recent pay cycle for the employee that ended before 1 March 2020 or 1 July 2020 (must consider both)
• the eligible business participant – the month of February 2020
• an eligible religious practitioner – the month of February 2020.

The Commissioner of Taxation can make a determination to deal with situations where an individual's hours were not usual during the reference period or if there are no records of the hours worked because of, say bushfires or flooding.

Standard reference period is not representative of an individual's typical work period?

The Commissioner has made a determination to provide an alternative reference period for the 80-hour test for specified classes of individuals.

The classes are:

• eligible employees:
  • whose total number of hours of work/paid leave/paid absence on public holidays in the standard reference period was less than 80 hours and compared with earlier 28-day periods, was not representative of the hours in a typical 28-day period. It may not be representative because of unpaid sick or parental leave or emergency services leave such as during the bushfires
  • who were not employed during all or part of the standard reference period
  • who were employed before 1 March or 1 July 2020 but the first pay cycle ended on or after those dates
  • who are treated as employed by an entity at an earlier time because the business changed hands but the employee was not employed by the entity for all or part of the reference period.

• eligible business participants or eligible religious practitioners:
  • who were actively engage/pursuing their vocation less than 80 hours during February 2020 and when compared with earlier 29-day periods (wholly within a calendar month) February 2020 hours were not representative of such a 29-day period, such as if the individual was sick.
  • who first satisfied the business participation requirement or commenced religious practitioner activities after 1 February 2020 to 1 March 2020, such as if the individual became a director or shareholder of a company part way through February 2020.

• regarding eligible business participants, where their entity conducted business or some of its business in a declared drought zone or declared natural disaster zone during February 2020.

Alternative reference periods are:

• Standard reference period hours not representative (backward looking test):
  • eligible employee – the 28-day period ending at the end of the most recent pay cycle for the employee before 1 March 2020 or 1 July 2020 in which the individual's total number of hours of work is representative
  • eligible business participant /religious practitioner – the most recent 29-day period, wholly within a calendar month, ending before 1 March 2020 where the circumstances, causing the February 2020 month to not be representative of typical hours of active engagement/activities undertaken, did not exist.
• not employed/a business participant/pursuing activities during all of the standard reference period:
  • eligible employee:
    • For pay cycles less than 28 days (e.g. fortnightly, or weekly), the alternative reference period is the first 28-day period, ending on or after 1 March 2020 or 1 July 2020, that wholly occurs during consecutive pay cycles
    • For pay cycles of 28 days or more (e.g. monthly), the alternative reference period is the first 28-day period, ending on or after 1 March 2020 or 1 July 2020, that wholly occurs during a pay cycle
    • or stood down employees part way through reference periods, the first 28-day period starting on the first day of a pay cycle on or after 1 March 2020 or on or after 1 July 2020 in which they were not stood down.
  • eligible business participant or religious practitioner – the 29-day period starting on the day the individual first began to satisfy the business participation requirement for the entity or first commenced doing religious practitioner activities for the religious institution.
• Eligible employee's first pay cycle ended after 1 March or 1 July 2020 – same forward-looking alternative reference period for employees not employed for the whole standard reference period.
• Eligible employee of a business that changed hands or transferred in a wholly-owned group – same forward-looking alternative reference period for employees not employed for the whole standard reference period.
• Eligible business participant's entity conducted business or some of its business in a declared drought zone or declared natural disaster zone during February 2020 – the most recent 29-day period ending before 1 March 2020, during which the entity did not conduct business or some of its business in a declared drought zone or declared natural disaster zone (backward-looking test).

Work hours of employees are not readily ascertainable

Where the employee's work hours are not readily ascertainable for the standard reference period, the Commissioner has made a determination – Coronavirus Economic Response Package (Payments and Benefits) Higher Rate Determination 2020 – that sets out the circumstances under which the higher rate applies to a class of employees.

These are individuals for whom their employer:

• does not have any record of the hours of work, paid leave and paid absence on public holidays in a reference period
• has incomplete records of those hours in a reference period.

This class includes individuals who are paid salaries, wages, commission, bonuses or allowances not tied to an hourly rate or contracted rate in the reference period.

The Commissioner has identified three circumstances in which the higher rate will apply. Broadly these are:

• In the reference period, the sum of the amounts included in the wage condition totalled A$1500 or more in respect of the employee.
  • Includes gross salary, wages, commission, bonus payments and allowances, inclusive of pay as you go (PAYG) withholding, and any fringe benefits or superannuation contributions provided under an effective salary sacrifice agreement
  • Excludes the 'top up' amount to meet the wage condition where the reference period includes a JobKeeper fortnight.
• Under a written industrial award, enterprise agreement, individual contract or other similar instrument governing the employment relationship, an eligible employee was required to work 80 hours or more (including paid leave and paid absence on public holidays) in the reference period.
  • Evidence must be in written form (paragraph 31 of the explanatory statement).
• Although not readily ascertainable, it can be determined based on reasonable assumptions that an eligible employee's hours in the reference period was 80 hours or more (including paid leave and paid absence on public holidays).
  • The test requires that the hours are not readily ascertainable. However, according to the explanatory statement it is also satisfied where, while the hours could be readily ascertainable, the steps necessary to determine the hours are not reasonable having regard to the burden it would place on the employer (paragraph 35).
  • For assumptions to be reasonable, they must be based on verifiable information. This could include information on how an employer's business usually operates, such as the ordinary business hours, average staffing level in any given week, common shift lengths for certain types of employees and the average number of shifts of employees (paragraph 37 of the explanatory statement).