For millions of Australians and businesses large and small, the Government’s JobKeeper 2.0 is bigger than the annual Federal Budget. On 21 July 2020, it was announced that the Government will be reducing the amount anyone on JobKeeper or JobSeeker is receiving and has announced a few other changes to the programs to tighten the eligibility for people on both.
Here's what we know.
Payments to be reduced – Twice
One of the biggest changes to JobKeeper is its new “two-tier” approach for full-time and part-time workers.
Part-time workers - payments to cut in half
If your employees were working less than 20 hours a week in February this year, their payment will drop from $1,500/fortnight to $750/fortnight from 28 September 2020.
This will reduce, again, from January 3 2021 to $650/fortnight. All payments will then stop on 28 March 2021.
Full-time workers - payments to reduce in September 2020, and again in January 2021
The government will begin to scale down how much employees will be paid on JobKeeper, as we expected.
Beginning 28 September, the fortnightly payment for full-time workers is decreasing from $1,500 to $1,200. From January 3, that will drop again, from $1,200 a fortnight to $1,000. All payments will then stop on 28 March 2021.
The Prime Minister said the payments were being changed now because the Government's systems were not equipped to deal with the "two-tier" system at the beginning of the pandemic (ABC).
Eligibility – Employers required to prove lost turnover again
If you're a business owner who’s signed up to JobKeeper, tests to prove your still experiencing hardship is becoming more stringent.
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 June quarter and for the September quarter 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 each of the June, September and December quarters based on actual GST turnover.
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 (Chartered Accountants). So, if you're applying for it for the first three months of next year, you need to prove you lost money in the June, September and December quarters.
Download the above JobKeeper 2.0 Infographic from Chartered Accountants by clicking here.
Things to start thinking about
Alongside the roll-out of JobKeeper 2.0, there are some points we can start to consider now to prepare for the changes.
- Employees - Do existing COVID workplace arrangements remain in place or require revision? What communications should employees receive now as a group and individually?
- Revisions to 2020/21 Forecasts – With the latest Treasurers announcements, you may need to revise your short-term business forecast.
- Cashflow and Solvency – Does your revised forecast show any upcoming cash positions that require action now?
- Government Assistance – What is the impact of the changes? Re-look at what assistance programs are currently supporting your business, customers and employees.
If you’d like help with JobKeeper 2.0 and developing a plan moving forward, contact us now. We’ll be sharing more information and points to consider over the coming weeks, so be sure to sign up for our newsletter!