Government Tightens Purse Strings with JobKeeper 2.0
JobKeeper payments will be less and harder to qualify for under the next phase of the scheme.
The current $1500 per fortnight JobKeeper payment will be reduced to between $750 and $1200 per fortnight from 28 September 2020. The lower $750 rate will apply to employees working less than 20 hours a week.
As expected, Prime Minister Scott Morrison and Federal Treasurer Josh Frydenberg announced the changes on Tuesday, 21 July 2020, which will be the first part of the phasing out of JobKeeper payments by the end of March 2021.
From 4 January 2021, the rate will again fall to $1000 per fortnight and $650 for people working less than 20 hours a week. The program will run to 28 March 2021, at a further cost of $16 billion, taking the entire JobKeeper program to $86 billion.
New Eligibility Tests
New eligibility tests beyond September 2020 are expected to result in numbers of people on JobKeeper reduced from 3.5 million to 1.4 million in the December quarter and 1 million in the March quarter.
Businesses will still be required to demonstrate the required reduction in turnover – 30 per cent for businesses with turnovers of $1 billion or less, 50 per cent for those with turnover of more than $1 billion, and 15 per cent for ACNC-registered charities.
However, the government will now require businesses to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover, rather than projected GST turnover.
From 28 September 2020, businesses will be required to show an actual decline in turnover for the June and September quarters to qualify for JobKeeper 2.0.
From 4 January 2021, businesses will need to reassess their turnover to demonstrate that they have met the decline in turnover test for each of the June, September and December 2020 quarters.
Treasurer Frydenberg said employers would need to demonstrate that they had met the relevant decline in turnover in both the June and September quarters to be eligible for the JobKeeeper payment in the December quarter.
“Employers will need to demonstrate that they have met the relevant decline in each of the previous three quarters ending on 31 December 2020 to remain eligible for the payment in the March quarter 2021,” Mr Frydenberg said.
While there are currently 3.5 million workers covered under JobKeeper, Treasury expects the new eligibility rules to see the figure fall to just 1.4 million workers for the December 2020 quarter, before dropping to 1 million workers in the March 2021 quarter.