JobKeeper Extension Reduces Payments, Updates Eligibility Criteria
The Australian Government announced it will extend the JobKeeper payment by six months to 28 March 2021, with a particular focus on support for businesses and not for profits most severely affected by Covid-19.
With new testing requirements and reduced cash payments, JobKeeper Extension, as it has been dubbed, includes the following updates:
- If you currently receive JobKeeper payments it remains unchanged and available until 27 September 2020
- The JobKeeper Extension will apply for an additional six months from 28 September 2020 to 28 March 2021
- The current $1500 per fortnight JobKeeper subsidy will be reduced from 28 September 2020 under a two-tiered approach and based on average working hours as at 1 March 2020
- At the end of September 2020 the fortnightly payment will be reduced to $1200 for full-time workers and to $750 for part-time employees working 20 hours a week or less, down from the current rate of $1500
- JobKeeper will be revised down further at the start of January 2021 to $1000 for full-time workers and $650 for part-time employees working 20 hours a week or less
- Businesses will have to reapply for JobKeeper at the end of September 2020 and again in January 2021 to ensure they still meet the criteria
- From 28 September 2020, businesses and not-for-profits seeking to claim JobKeeper will be required to reassess their eligibility for the JobKeeper extension with reference to their actual turnover rather than projected turnover.
The existing JobKeeper and JobKeeper Extension will continue to be available to new participants in the program provided they meet the relevant tests. This includes carrying on a business and having eligible employees as at 1 March 2020.
Businesses will also still be required to demonstrate the required reduction in turnover as follows:
- 30 percent for businesses with turnover of $1Billion or less
- 50 percent for those with turnover of more than $1Billion
- 15 percent for ACNC-registered charities.
Businesses will need to separate their permanent employees from casuals and apply the 20-hour work test for the purpose of the JobKeeper payment rates.
Businesses must also ensure their record-keeping systems are up to date and accurate to demonstrate actual, rather than projected, declines in turnover for the updated eligibility test.
The Australian Tax Office data shows that more than 960,000 entities have enrolled for JobKeeper, covering 3.5 Million workers. As of 15 July, $29.8 Billion worth of payments have been made, out of the $70 Billion estimate.
The government will also reduce the JobSeeker unemployment supplement at the end of September to about $800 a fortnight until the end of the year.
The rate of JobSeeker before Covid-19 was about $560 a fortnight. This was increased to $1100 with a $550 supplement payment which was legislated to end in September, along with JobKeeper.
If you need assistance understanding the JobKeeper Extension and how it will affect your business, please contact Hood Sweeney on 1300 764 200.