The Federal Government announces changes to the JobKeeper scheme
As the long-term economic effects of COVID-19 are felt across Australia, the Federal Government has announced the decision to reduce the JobKeeper and JobSeeker payments to those who are unable to work and unemployed. Alongside these changes, the Government are also tightening the eligibility criteria for both payments. As a prominent Melbourne business advisor accountant, SP Solutions are on hand to guide you through the changes and how they might affect your business.
JobKeeper payments are set to be reduced twice
The Government is set to reduce the amount paid out to those receiving the JobKeeper allowance. From the end of September, full-time workers will receive $1200, a decrease from the original $1500 fortnightly payment. On January 3rd, the payment is set to reduce further to $1000 each fortnight for full-time workers. The scheme is scheduled to end on March 28, 2021, by which time it will have cost the Government $86 billion.
Part-time workers will see a 50% reduction in payment
JobKeeper is now set to be split into two categories consisting of part-time and full-time workers. This means that those working less than 20 hours per week in February will see a 50% reduction in JobKeeper payments from $1500 per fortnight to just $750 after September. Payments for part-time workers will be reduced further in 2021 to $650 per fortnight.
Employers must prove a consistent loss of turnover
Business owners who have signed up to JobKeeper will now also be tested against more stringent criteria. Businesses will still have to prove that they have experienced at least a 30-50% loss of turnover, but this test will be carried out again at the end of September and then in January. Businesses with an aggregate turnover of under $1billion must prove that they have seen a 30% reduction in turnover and those with a turnover of more than $1 billion must prove that they have seen a fall over 50% to qualify for the payments.
More than this, employers will have to prove that they have seen a significant fall in turnover in the previous quarters to meet the requirements for the payment. This means that in order to continue to receive the payment, a business would have to show a reduction in turnover in the June, September and January quarters. Those operating in industries that experience significant ups and downs could thus find it difficult to satisfy the requirements. Industries such as construction could be profoundly affected.
Many business advisory services have warned that the stringent new requirements mean that businesses could lose the subsidy if they begin to show signs of recovery even if lockdown measures are brought back into place. It is estimated by the Treasurer that the number of people eligible for JobKeeper in early 2021 will fall to around 1 million.
Coronavirus supplement will also be reduced
The Coronavirus supplement, an additional amount paid each fortnight, is also set to reduce. The $550 payment will be reduced after September to $250 per fortnight making the total payment $815 instead of $1115. However, after September, an individual could earn $300 per fortnight rather than the original $106 before the JobSeeker subsidy is impacted. The Government claim that this will encourage people to seek work without putting their JobSeeker payment at risk.
The Government is expected to provide further information about the future of JobSeeker subsidies in the coming months, with Prime Minister Scott Morrison claiming the payment will continue into 2021.
If you require information on the new JobKeeper requirements and how they could affect your business, get in touch with SP Solutions for quality business advisory services from a specialist business advisor accountant.