JobKeeper 2.5 announced. What do you need to know?
5 min read
JobKeeper keeps on iteratively morphing and reshaping as we roll through this pandemic of ours. It’s not exactly easy, even for the keen observer, to keep track of exactly what the deal is at any particular moment.
Let’s comb through the most recent JobKeeper announcements and determine what it was, and where it currently stands.
- There is now a lower threshold for proving business pain before qualifying for JobKeeper, from 3 months to one month.
- The newly announced JobKeeper extension will begin on September 28.
- This means that many more businesses will benefit from JobKeeper that were previously denied.
- Treasurer Josh Frydenberg says the Victorian lockdowns in particular have necessitated the additional $15 billion injection.
- Workers will qualify if they were hired after July 1 as opposed to March 1.
The old criteria
Up until now, there’s been a criteria in place to ensure that JobKeeper payments were awarded to businesses who genuinely suffered lower cashflow specifically due to COVID-19 and various lockdown measures.
The criteria was that you would need to prove, year on year, that your business suffered at least a 30% cashflow drop over the previous 3 months.
The idea being that if your business was on a downward slope regardless of the negative business effects of COVID-19, you wouldn’t qualify.
This would of course prevent businesses not specifically affected, claiming important funds needed elsewhere.
Anecdotally, this has still left a lot of businesses in a limbo, or unable to claim JobKeeper by small margins.
The new criteria
Further changes were announced on August 7 2020 to amend the date for employee eligibility and make it easier for organisations to qualify for the JobKeeper Payment extension from 28 September 2020.
Under the previous guidelines, a business would have needed to record an actual GST turnover loss for the June, September and December quarters of this year to qualify for the previously announced January 2021 extension.
Now, a business only needs to show a loss for the December 2020 quarter to re-qualify for the scheme in January 2021.
In addition, employees will now qualify if they were hired after July 1 as opposed to March 1.
The Victorian connection
It’s no surprise that this new JobKeeper expansion has largely come about due to the Stage 4 lockdowns in Victoria.
The new outbreak has seriously impacted already struggling businesses across the southern state, particularly in harder-hit metropolitan Melbourne.
Even though the new JobKeeper extension will apply across Australia and will include every state and territory, it’s expected that Victorian businesses will see the most benefit.
As Treasurer Josh Frydenberg said of the announcement:
“We believe that about 530,000 extra Victorian employees will now join the JobKeeper program over the September quarter, that means 1.5 million Victorian employees will be using JobKeeper,” he said.
“That’s nearly half of the private sector workforce across the whole state.”
It was the seriousness of this revelation, at least in part, that prompted the expansion of the JobKeeper scheme.
Curent Jobkeeper timeline and extension overview
The JobKeeper payment has iteratively changed over time and has a new timeline to be considered and understood. As it stands:
- On July 21 the Government announced an extension of the JobKeeper Payment until March 28 2021. The previous cut off was September 28 2020.
- The current Job Keeper rate of $1,500 per fortnight will remain until the end of September, 2020.
- After September, the JobKeeper payment will be clipped to $1,200 per fortnight for full time employees.
- After September, the JobKeeper payment will also be clipped to $750 per fortnight for those working less than 20 hours a week.
- From January 2021, JobKeeper will be again reduced to $1,000 for full-time employees and $650 for people working less than 20 hours per week.
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