Changes to JobKeeper and JobSeeker
JobKeeper to be extended by six months – changes apply
The JobKeeper Payment is currently due to finish on 27 September 2020, however the Federal Government has announced today the subsidy scheme will remain available for eligible businesses (including the self-employed) and not-for profits until 28 March 2021. The JobKeeper Payment will become two-tiered and be reduced.
From 28 September 2020 until 3 January 2021 the JobKeeper Payment will be reduced:
- $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average;
- $1,200 per fortnight for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
- $750 per fortnight for employees and business participants working fewer than 20 hours a week.
From 4 January until 28 March 2021 the JobKeeper Payment will be further reduced:
- $1,000 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average;
- $1,000 per fortnight for business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
- $650 per fortnight for other eligible employees and business participants.
Employers will be required to nominate the payment rate they are claiming for each eligible employee (or business participant). Employers should carry out an assessment to determine what JobKeeper Payment subsidy they may receive in respect to their casual and part-time employees.
The current JobKeeper Payment is based on a prospective test (i.e. businesses who expected to see a reduction of the relevant threshold).
Reassessment of eligibility will be required from 28 September 2020 and this will be referenced by actual GST turnover for the June quarter (April, May, June) and the September quarter (July, August, September). Turnover comparisons will generally be made with the corresponding quarters in 2019.
Businesses and not-for-profits will be required to demonstrate that they have suffered an ongoing significant decline in turnover as per their relevant threshold in both these quarters to be eligible in the December quarter. This means, showing either a 30% or 50% reduction in turnover depending on whether the businesses aggregated turnover is $1 billion or less, or more than $1 billion. A 15 per cent reduction in turnover applies for Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities).
Other eligibility rules for businesses and not-for-profits and their employees remain unchanged.
Reassessment of eligibility will be required again for the March quarter. Employers will need to demonstrate they have met the relevant decline as per their relevant threshold in each of the previous three-quarters ending on 31 December 2020.
Eligibility will generally be assessed based on the details reported in the Business Activity Statement (BAS). The deadline to lodge a BAS for the September quarter or month is in late October. The deadline for lodgement of the December quarter or month is late January (monthly) or late February (quarterly).
To meet the wage condition under the JobKeeper Payment scheme requires an employer to pay their eligible employees in advance of receiving the JobKeeper Payment from the ATO. It is necessary that employers assess their eligibility for JobKeeper in advance of the BAS deadline.
Importantly, businesses and not-for-profits that do not meet the turnover test in the extension period will not affect their eligibility for JobKeeper Payments prior to 28 September 2020.
The JobKeeper Payment will continue to remain open to new participants that meet eligibility requirements.
Aitken Legal reminds employers of the importance of forecasting to assess their eligibility for JobKeeper Payments during the extension period.
Coronavirus supplement for JobSeeker extended by three months – changes apply
The Government has also announced today that the payment period of the temporary Coronavirus Supplement for those on income support will be extended from 25 September 2020 to 31 December 2020. However, the Coronavirus Supplement will be reduced from $550 per fortnight to the rate of $250 per fortnight. Both existing and new income support recipients will continue to be paid the Coronavirus Supplement.
From 25 September 2020 the Government will be reintroducing a range of means testing arrangements, mutual obligations, increase the JobSeeker Payment partner income test and improve incentives to work.
Changes include allowing individuals to earn up to $300 per fortnight (income free threshold) without foregoing any JobSeeker payment or affecting their eligibility for the Coronavirus Supplement.
The criteria for JobSeeker Payment and Youth Allowance (Other) will be expanded and continue to provide payment access for permanent employees who are stood down or lose their employment, sole traders, and the self-employed until 31 December 2020.
Aitken Legal recommends employers become familiar with the employee incentives to work built into JobSeeker income support system.
Disclaimer: The information contained this article is general and intended as a guide only. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this update, Aitken Legal does not accept liability for any errors it may contain. Liability limited by a scheme approved under professional standards legislation.