Learn about the targeted changes to the JobKeeper Payment from 28 September 2020...
On the 21st of July the government unveiled their JobKeeper review, two days ahead of the Economic Review which is scheduled for the 23rd of July.
According to the review’s findings, an unintended outcome is the scheme’s tendency to produce “adverse incentives”, which is why JobKeeper 2.0 will be a scaled-down, two-tiered version of its predecessor.
Aside from tightening eligibility, the post-September JobKeeper will reflect hours worked prior to the pandemic, offering a lower subsidy rate to those that were earning less — unlike the current scheme which has meant a quarter of participants receiving the payment have had an income rise compared to February.
The new JobKeeper payment will be reduced to $1,200 per fortnight from October, while those working under 20 hours pre-COVID will receive $750 instead of the $1,500 flat rate. As of the start of January until the end of March 2021, the payment will be lowered further to $1,000 and $650, respectively.
From 28 September 2020, the JobKeeper Payment will be targeted to employers that have been most significantly impacted, the payment rates will be stepped-down and two tiers of payment will be introduced.
Further changes will be made to eligibility, tweaking the “once in, always in” rule through the introduction of subsequent eligibility tests.
Under the current scheme, businesses with turnover under $1 billion have been eligible for the payment if they experienced an estimated drop in turnover of at least 30 per cent at the time they applied; for those with turnover above this limit, the drop was 50 per cent. However, according to the review’s findings, the fact that that the turnover test has been based on projected changes may have been a disservice to the scheme.
As such, the new turnover test will be based on “measured or actual turnover change rather than projected change when businesses first applied”.
The JobKeeper review found that the scheme was pretty well targeted, going mostly to businesses that experienced an average decline in turnover in April of 37 per cent against the same month last year, there was also evidence of it stunting labour mobility and keeping non-viable businesses alive.
If you have engaged us to manage your JobKeeper Payments for you then we will be in touch to work through the new eligibility requirements with you.
More detailed information is to come and will be updated on the ATO’s website: https://www.ato.gov.au/general/JobKeeper-Payment/
We’re here to help.
Please get in touch with our office on 07 5649 7650 or [email protected].