JobKeeper extended to March 2021

The Federal Government has announced an extension of its JobKeeper subsidy program by six months as the country, particularly the state of Victoria, grapples with a fresh surge in COVID-19 cases.

The program was scheduled to end in September, 2020, but will now be extended to March 28, 2021. However, from September 28 onwards, the payment will be reduced in two stages and a new two-tier payment structure will be introduced to better align with the amount of hours put in by employees before the pandemic.

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The extension is expected to cost an additional $16.6 billion.

Treasurer Josh Frydenberg said the extension recognised Australia’s economic recovery was still in its early stages and a number of businesses and individuals remained significantly affected by the global COVID-19 pandemic.

“The Government’s focus remains on reopening the economy where it is safe to do so, but the extension of these measures recognises that some parts of the economy will continue to be affected and need continued support,” he said.

“Sadly, as a result of this global health pandemic, businesses will close and people will lose their jobs, but that is why we have extended the Coronavirus Supplement and announced a new skills package to help people transition from welfare to work.

“It is also why we are extending the JobKeeper Payment beyond September to help keep businesses in business and Australians in jobs as our economy reopens.”

Currently, the JobKeeper payment pays eligible businesses $1500 per fortnight per eligible employee, regardless of the hours worked.

From September 28 onward to Jan 3, 2021, that amount goes down to $1200 for employees who worked over 20 hours per fortnight before March 1, 2020; while those who worked less than 20 hours per fortnight before March will receive $750.

From Jan 4 to March 28, 2021, the full rate reduces again to $1000 per fortnight while employees who put in less than 20 hours pre-pandemic will receive $650 per fortnight.

From September 28, eligible organisations will need to reassess their eligibility every three months and provide proof that their businesses have suffered ongoing significant declines in turnover in order to continue receiving the payments.

According to the eligibility terms set out in the initial JobKeeper package announced in March, businesses under $1 billion will have to have suffered a reduction in revenue of 30 per cent or more over a minimum one-month period to be eligible.

Employers with an annual turnover of $1 billion or more would be required to demonstrate a reduction in revenue of 50 per cent or more to be eligible.

For example, to receive JobKeeper payments past September 28, businesses need to provide details of their Q2 (April, May and June) and Q3 (July, August and September) turnovers to prove that they still meet the criteria for the payments. If they do, they will continue receiving the payments until Jan 3, 2021.

In January 2021, employers will need to again reassess their eligibility for the JobKeeper Payment to continue receiving payments until March 28, 2021. They will need to demonstrate that they have continued to suffer a significant drop in revenue in each of the previous three quarters ending on 31 December 2020 to remain eligible for the JobKeeper Payment.

The Government added the payment will continue to remain open to new participants that meet the eligibility requirements.