JobKeeper 2.0 – What this Means for You

One thing that is certain with these Coronavirus times is the frequency of changes, and last week’s announcements by the Federal Government were no different.  As expected, the Government is scaling down how much it pays to employees currently on JobKeeper.

From the end of September, the fortnightly payment for full-time workers is decreasing from $1,500 to $1,200. That will last until the end of the year, then from January 3 it will drop again, from $1,200 to $1,000 a fortnight for full-time workers.

The Australian Treasurer Josh Frydenberg said the new end date for "JobKeeper 2.0" would be March 28 2021. The extension will cost the Government around $16 billion, taking the scheme's total cost to $86 billion.

One of the other major changes to JobKeeper is it's now going to be split into "two tiers", one for full-time and one for part-time workers.

If you were working fewer than 20 hours a week in February this year, or "pre-COVID" as Mr Frydenberg described it, your payment will drop from $1,500 to $750 a fortnight after September. At the beginning of 2021 it will be reduced again to $650 a fortnight.

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.

Employers will also have to prove they've lost turnover again. If you're a business owner who's signed up to JobKeeper, the test for whether or not you're still experiencing hardship is becoming more stringent.
The tests of at least a 30 or 50 per cent reduction in turnover, or 15 per cent for charities, will stay the same, but they'll be reapplied at the end of September and then again at the start of January.

Businesses with an aggregate turnover of $1 billion or less currently have to prove a 30 per cent fall in turnover, and businesses with a turnover of greater than $1 billion need to show a 50 per cent fall to qualify.

On top of that, employers also have to prove they've experienced the relevant decline in turnover in all previous quarters to receive the payment. 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.

According to the Treasurer, it's estimated that the number of people who'll be eligible for JobKeeper by the start of next year will be around 1 million — down from the 3.5 million workers currently covered by the program.

Also as expected, the JobSeeker coronavirus supplement — the amount extra paid per fortnight — is being reduced, but the base rate isn't changing. The $550 supplement is being cut after September to $250 a fortnight, meaning the total payment will go from $1,115 to $815.

However, from the end of September you can now earn $300 a fortnight, instead of the previous $106, before your JobSeeker payment is affected. The Government hopes by doing that it can encourage people to get into work without worrying that their JobSeeker payments will be cut.
 
The Prime Minister said information about the future of JobSeeker post-December would be made in the next few months, but that it was likely to continue in some form into 2021.

While a lot of the changes to the programs are happening at the end of September, people on JobSeeker will be required to start actively looking for work again from the beginning of August. From August 4 the Government is bringing back the requirement that anyone receiving the unemployment benefit has to connect with employment services and undertake four job searches a month, as long as it's safe for them to do so. Penalties for people who don't meet that requirement and don't have a valid reason are also coming back, as well as for anyone who refuses a job that's been offered to them.

Then from the end of September — when the current JobSeeker supplement ends — the number of job searches people have to undertake a month will increase, but the exact number is still to be announced.
 
More changes means more information to digest. If you have any questions about how the above information may relate to you or your business, please don’t hesitate to contact us.

Photo by Clayton Cardinalli on Unsplash