Author: Tony Rule, Partner, TAG Financial Services
Yesterday, the Federal Government announced that the JobKeeper wage subsidy payments will extend beyond 27 September by another six months and a three month extension to the JobSeeker supplement, but with a number of changes including:
1- Full Time
Employees (who were working more than 20 hours per week on average for the month of February 2020) will generate a wage subsidy of $1,200 per fortnight for the three months to Christmas and then $1,000 per fortnight for the three months to end of March 2021 (down from $1,500 per fortnight currently) providing the business continues to meet the eligibility criteria.
2- Part Time
Employees (who were working less than 20 hours per week on average for the month of February 2020) will generate a wage subsidy of $750 per fortnight for the three months to Christmas and then $650 per fortnight for the first three months of 2021 (down from $1,500 per fortnight currently) providing the business continues to meet the eligibility criteria.
3- Employee Criteria
Remains the same throughout the extension period (ie. must be full-time, part-time or a fixed-term employee or a long term casual employee as at 1 March 2020, must be 18 years old at 1 March and an Australian Resident not on parental leave or a workcover recipient no longer able to work).
4- Existing Eligibility
For businesses currently receiving JobKeeper payments will not be changed for the period up to 27 September 2020.
5- 1 October Eligibility
For businesses to continue to receive JobKeeper for the December 2020 quarter, they will need to reassess their eligibility using their actual June and September 2020 quarterly turnovers showing at least a 30% reduction (where there income is under $1b) to “demonstrate that they have suffered an ongoing significant decline in turnover” in both quarters.
6- 1 January Eligibility
For businesses to continue to receive JobKeeper for the March 2021 quarter, they will need to show that they have met the relevant decline in actual turnover of 30% (where income is less than $1b) in each of the previous three quarters ending on 31 December 2020.
7- Alternative Tests
Alternative tests will continue to be available to businesses where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019 and will be in line with the ATO’s existing discretion guidelines for the first phase of the JobKeeper program.
8- New JobKeeper Recipients
New JobKeeper recipients can apply for the JobKeeper payment at any time, but they will need to meet the existing eligibility requirements and the additional turnover tests during the extension period in order to receive the wage subsidy.
9- Government Expenditure
Government expenditure on JobKeeper to 30 September 2020 is expected to be $70b, with another $16.6b expected to be spent on the program from October 2020 to March 2021 indicating a 76% reduction in support expected to be provided to businesses in the next phase of the JobKeeper program.
10- JobSeeker Supplement
JobSeeker supplement payments will also continue to 31 December 2020, but at a reduced rate of $250 per fortnight (down from $550 per fortnight) and will also be subject to new means testing arrangements.
Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).