The Australian Government has announced cuts to payments under the JobKeeper and JobSeeker schemes but has extended their life spans.
JobKeeper 1.0 will remain till 27 September 2020 and thereafter, JobKeeper 2.0 will continue for a further six months till 28 March 2021. The temporary JobSeeker coronavirus supplement will be extended to 31 December 2020.
The changes to JobKeeper are:
- There will be two rates of JobKeeper payments for eligible businesses (including self-employed) and not-for-profits:
1. From 28 September 2020 to 3 January 2021:
- A$1200 per fortnight for:
- eligible employees who worked 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and
- eligible business participants who were actively engaged in the business for 20 hours or more per week on average
- A$750 per fortnight for other eligible employees and business participants.
- A$1200 per fortnight for:
2. From 4 January 2021 to 28 March 2021:
- A$1000 per fortnight for:
- A$650 per fortnight for other eligible employees and business participants.
The JobKeeper payment will be tapered in the December and March quarters to encourage businesses to adjust to the new environment, supporting a gradual transition to economic recovery. The two-tiered payment aims to better align the payment with the incomes of employees before the onset of the COVID-19 pandemic.
Further changes were announced on 7 August 2020 to adjust the employee reference date for eligibility and make it easier for organisations to access JobKeeper payments in light of the further restrictions in Victoria. From 3 August 2020, the relevant date for employment will move from 1 March to 1 July 2020.
- The thresholds for the decline in turnover test will remain the same but now the test must be applied at several points:
- To be eligible for the JobKeeper payments from 28 September 2020 to 3 January 2021, businesses and not-for-profits must satisfy the relevant decline in turnover test for the September quarter 2020 (July, August, September) based on actual GST turnover.
- To be eligible for the JobKeeper payments from 4 January 2021 to 28 March 2021, businesses and not-for-profits must satisfy the relevant decline in turnover test for the December quarter 2020 (October, November, December) based on actual GST turnover.
The requirement to reassess the eligibility for the JobKeeper payments over the extension period is to ensure that only the businesses that need the most help will continue to receive the payments.
The JobKeeper payment will remain open to new recipients provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.
The Commissioner of Taxation will have discretion to set alternative tests where an employee’s or business participant’s hours were not usual during the February and/or June 2020 reference period. The period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility.
Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper payment (before tax), based on the payment rate that applies to each employee (i.e. the wage condition).
Further information on JobKeeper 2.0 can be found in the Treasury Fact sheet: Extension of JobKeeper Payment
The changes are expected to be implemented through amendments to legislation and the legislative instrument, Coronavirus Economic Response Package (Payments and Benefits) Rules 2020
Changes to the JobSeeker program include:
- The JobSeeker coronvirus supplement will decrease to A$250 a fortnight from A$550. Therefore, people on JobSeeker will receive a decrease from A$1100 to A$800 (base rate of A$550 plus the coronavirus supplement) per fortnight after September.
- Recipients will be allowed to earn A$300 a fortnight before facing a reduction in their Government payment.
- Easing of restrictions for sole traders.
In conjunction with the Government’s announced changes, Treasury has released the report, The JobKeeper Payment: Three-month review. The Government considered the findings in the report in formulating its changes to the JobKeeper payment.
The Government’s announcement – 7 August 2020
Following the introduction of stage four restrictions in metropolitan Melbourne and stage three restrictions across regional Victoria, the Government will help more businesses qualify for JobKeeper.Read more
Treasury - JobKeeper Payment website
The Government is extending the JobKeeper payment by a further six months to March 2021. Support will be targeted to businesses and not-for-profits that continue to be significantly impacted by the Coronavirus.Read more
The Government’s announcement - 21 July 2020
Prime Minister Scott Morrison said the extra assistance would continue supporting hundreds of thousands of Australians who are without work, and offer businesses and their workers a lifeline to not only get through this crisis, but recover on the other side.Read more
JobKeeper review report
The Government considered the findings in the report in formulating its changes to the JobKeeper paymentRead more