Treasurer Josh Frydenberg has announced that some of the previously announced JobKeeper changes would be softened given the impact of the resurgence of coronavirus in Victoria.
Previously, businesses were going to have to show declines in turnover in the June and September quarters to qualify for the subsidy after 28 September.
However, this has now changed so that they will only have to show a fall in turnover in the September quarter compared with a comparable period in 2019.
This change has largely been brought in so that Victorian businesses that were faring well before the second lockdown came into effect in Melbourne would not be disqualified from the subsidy should their turnover fall in the September quarter (for example, due to the enforced business closures that came into effect late on 5 August).
Moreover, after 4 January, businesses and not-for-profits will have to show a fall in the December quarter compared with a comparable period the year before instead of having to demonstrate a fall in turnover in each of the June, September and December quarters to access the payment.
The JobKeeper payment is designed to help businesses affected by the coronavirus cover the costs of their employees’ wages, so that more employees can retain their job and continue to earn an income. Initially scheduled to expire in September, the government last month announced an extension of the scheme to 28 March 2021, given the ongoing impacts of the COVID-19 virus.
To be eligible for JobKeeper payments under the extension, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover (with reference to their actual GST turnover) of:
- 50 per cent for those with an aggregated turnover of more than $1 billion;
- 30 per cent for those with an aggregated turnover of $1 billion or less; or
- 15 per cent for Australian charities and not-for-profits commission-registered charities (excluding schools and universities).
However, if a business or not-for-profit does not meet the turnover test for the extension period, this does not affect their eligibility prior to 28 September 2020.
To claim for staff, an employee would have to have been on the books as of 1 July 2020 (instead of 1 March 2020, as previously announced).
As previously announced, the payments rates from 28 September 2020 - 3 January 2021 will drop from $1,500 to $1,200 per fortnight for every employee that worked for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average. The payment drops to $750 per fortnight for other eligible employees and business participants.
Payment rates from 4 January 2021 to 28 March 2021 will then fall to $1,000 per fortnight and $650, respectively.
The changes will apply nationwide and will cost the budget $15.6 billion, with the vast majority (around $13 billion) of the expansion expected to go to businesses in Victoria, given Melbourne’s second lockdown.
The move takes the original $70-billion package to over $100 billion.
Treasurer Frydenberg commented: “It’s a very substantial commitment.
“We’re now going to have JobKeeper at $101 billion, the single largest program that any Australian government has ever undertaken in terms of economic support.”
Prime Minister Scott Morrison told 2GB radio this morning: ‘“[This is about] saving lives and saving livelihoods. The JobKeeper program is there when the virus hits and it’s hit hard in Victoria in particular. I mean, these changes apply right across the country, by the way, not just in Victoria. There’ll be some additional people who get access to it, we expect in other states and territories, but it’s principally Victoria.”
He continued: “It takes the total bill now over $100 billion. But it’s been one of the most successful programs of its kind in the world.”
[Related: JobKeeper extended to 2021]
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.