The Australian Government has announced cuts to payments under the JobKeeper and JobSeeker schemes but has extended their life spans.
JobKeeper 2.0
The JobKeeper Payment, which was originally due to run until 27 September 2020, will now continue to be available to eligible businesses (including the self-employed) and not-for-profits until 28 March 2021.
The payment rate of $1,500 per fortnight for eligible employees and business participants will be reduced to $1,200 per fortnight from 28 September 2020 and to $1,000 per fortnight from 4 January 2021. From 28 September 2020, lower payment rates will apply for employees and business participants that worked fewer than 20 hours per week.
Employer Eligibility
Eligibility requirements to claim JobKeeper are changing from 28 September 2020.
The current basic test for JobKeeper remains in place until 28 September 2020 and requires a 30% decline in projected GST turnover for business with an aggregated turnover below $1 billion (50% decline for businesses with aggregated turnover above $1 billion). Registered charities are required a 15% decline in projected GST turnover to be eligible for the JobKeeper Payment.
To be eligible from 28 September 2020 to 3 January 2021 the measure of decline in aggregated GST turnover must reflect a 30% (or 50%/15%) decline in actual GST turnover in both the June and September 2020 quarters to 3 January 2021, relative to comparable 2019 periods.
To be eligible from 4 January 2021 to 28 March 2021 the measure of decline in aggregated GST turnover must reflect a 30% (or 50%/15%) decline in actual GST turnover in each of the June, September and December quarters 2020, relative to comparable 2019 periods.
During each of these periods the JobKeeper scheme remains open to new recipients provided they meet the existing eligibility requirements and the additional turnover tests during the extension periods.
Alternative tests are available for the JobKeeper 2.0 extension periods to establish eligibility however their use is at the discretion of the Commissioner of Taxation.
Worker Eligibility
Eligibility requirements for employees remain unchanged (as listed below).
- are currently employed by the eligible employer (including those stood down or re-hired)
- were employed by the employer at 1 March 2020
- are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020)
- are at least 16 years of age
- are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder
- are not in receipt of a JobKeeper Payment from another employer
As mentioned the payment rates change from 28 September based upon two tiers.
For an employee to remain in Tier 1 requires the employee to have worked for 20 hours or more on average in the 4 weeks of pay periods before 1 March 2020. This has been dubbed the “February 2020 look-back test”.
All employees that remain eligible for JobKeeper 2.0 but do not satisfy the 20+ work hours test fall in to Tier 2 and receive the lower of the two available fortnightly JobKeeper payments.
Sole Trader and Eligible Business Participants
JobKeeper eligibility remains for sole traders, a partner in a partnership, a beneficiary of a test, a shareholder or director of a company.
From 28 September the “February 2020 look-back test” will be applied, calculated by reference to time spent “actively engaged in the business”.
Further information about how the JobKeeper Payment works is available at www.ato.gov.au/general/JobKeeper-Payment
JobSeeker
The Government is extending the payment period of its temporary Coronavirus Supplement from 25 September 2020 to 31 December 2020.
The amount of the Coronavirus Supplement will be adjusted for this period to reflect the gradually improving economic conditions. The Government is also improving incentives and gradually reintroducing obligations for payment recipients to seek work.
The Coronavirus Supplement will continue to be $550 per fortnight for payments up to and including the reporting period ending 24 September 2020.
From 25 September 2020 to 31 December 2020, the Supplement amount will be $250 per fortnight.
Changes are being made to the JobSeeker Payment and Youth Allowance (other) income tests to improve incentives for individuals to re-enter the workforce or take on additional work as the economy recovers.
From 25 September 2020 until 31 December 2020, the income free area for JobSeeker Payment and Youth Allowance (other) will increase from $106 per fortnight for JobSeeker Payment and $143 per fortnight for Youth Allowance (other) to $300 per fortnight for both.
Jobseekers’ mutual obligation requirements were suspended from 24 March 2020 until 8 June 2020.
During this time unemployment payment recipients were not required to attend appointments, look for work or participate in activities.
The gradual reintroduction of mutual obligation requirements commenced on 9 June 2020, including:
- voluntary job searches;
- at least one phone or online appointment with a jobseeker’s employment services provider;
- voluntary participation in activities, either online or in person; and
- no payment suspensions or penalties for failure to comply.
When determining a jobseeker’s mutual obligation requirements, an employment services provider will take into consideration the jobseeker’s capacity to comply with requirements and the state of the local labour market.
If you have any questions about the information above please contact the team at Abbotts, we will be happy to assist you. You can find details to get in touch with us on our contact us page.
