Yesterday the Government announced their plan for the winding back of the JobKeeper program.  The impact of the program finishing abruptly on the 27^th September has been a talking point in business circles for quite some time now, especially with the rise of COVID-19 infections in the eastern states.  The changes announced will hopefully assist businesses to prepare for the end of the program and plan their future with some certainty.

Highlights include:

• There will be no changes to the JobKeeper payments businesses are receiving between now and 27 September
• The program has been extended until 28 March 2021
• There will be new eligibility criteria for businesses to access JobKeeper from 28 September 2020
• From 28 September 2020 the JobKeeper payment will become a “two-tiered” payment

No changes to the original JobKeeper

Businesses that have qualified for JobKeeper will continue to receive the payments based on their initial qualification.  Businesses will be required to continue to complete the Monthly Business Declaration and to ensure eligibility of employees e.g. not claiming JobKeeper when employees leave their employment.  Business are also still eligible to enter the program based on the current rules.

The current payment of a flat rate of $1,500 per fortnight per employee will not change before 28 September 2020.

From 28 September 2020

From 28 September, businesses will be required to reassess their eligibility to continue to access JobKeeper.  To be eligible, businesses will be required to show an actual reduction in turnover of 30% or more for both the June quarter and the September quarter.  This is a quantitative test that can be objectively measured.

From this date, JobKeeper payment rates will become a two-tiered payment system:

• $1,200 per fortnight for employees who work more than 20 hours per week on average; or
• $750 per fortnight all other employees or eligible business participants

From 4 January 2021

From 4 January 2021, businesses will again be required to reassess their eligibility to continue to access JobKeeper to the close of the program on 28 March 2021.  To be eligible for this quarter, businesses will be required to show an actual reduction in turnover of 30% or more for the June, September and December quarter.

The JobKeeper payment rates will reduce again at this point:

• $1,000 per fortnight for employees who work more than 20 hours per week on average; or
• $650 per fortnight all other employees or eligible business participants

Comments

Overall the announcements are welcome and will help provide businesses with some certainty.  The extension of JobKeeper is a good decision, along with tailoring eligibility for businesses still impacted by COVID-19.  A two-tiered payment structure and the reduction in payment amounts means that businesses can plan with certainty knowing the level of support they are likely to receive for the next 3, 6 or 9 months.