COVID-19 - JobKeeper Extension Announced
Yesterday, the Treasurer announced an extension of the JobKeeper system until 28 March 2021.
There are two very positive things about this. Firstly, the subsidy will continue beyond its originally scheduled end date. Also, the requirements for continued eligibility until the end of September are unchanged. There had been some concern that the review of the programme may have meant further eligibility tests as from now and/or a scaling back of amounts paid to business for their eligible employees and business participants.
Businesses which are currently eligible will retain that eligibility regardless of turnover changes since their initial qualification until 27 September 2020. Businesses which are currently eligible will continue to receive $1,500 a fortnight for their eligible employees and business participants also until 27 September.
In short summary, nothing has changed for currently enrolled businesses.
To continue eligibility after 27 September, a business will need to demonstrate that the required percentage decline in turnover occurred in both the June and September 2020 quarters.
To continue eligibility after 4 January 2021, a business will need to demonstrate that the required percentage decline in turnover occurred in all of the June, September and December 2020 quarters.
Businesses will need quickly determine their turnover decline after the end of September and December so they know whether employees should keep receiving top-up payments for continued eligibility.
The rate of payment is to change after 27 September 2020 and also after 3 January 2021. There will be a new two-tiered structure to payments after 27 September 2020.
The amount which is received by the business will depend on the average weekly hours an eligible employee or business participant spent working in the business during February 2020.
For all eligible employees and business participants who were working in the business for twenty hours or more a week on average in the month of February 2020, the business will receive $1,200 per fortnight from 28 September 2020 and $1,000 per fortnight from 4 January 2021.
For all other eligible employees and business participants, the business will receive $750 per fortnight from 28 September 2020 and $650 per fortnight from 4 January 2021.
The announcement raises a number of issues for eligible businesses and I will address these in the near future. Some clarity will be provided when the new Rules are released.