The government has announced that the JobKeeper wage subsidy will continue past its scheduled September expiry date, with support extended to March 2021. The announcement was made ahead of Thursday’s ‘mini-budget’ economic update, by Prime Minister Scott Morrison and Treasurer Josh Frydenberg confirming cuts to payments in both programs.
It has come as big relief to small and medium sized businesses especially in Victoria where things have slowed down again having been placed in lockdown 2.0.
Almost all stakeholders – without any exceptions have hailed the announcement which was being seen as ending come September.
Elinor Kasapidis, CPA Australia’s tax policy adviser says, “The Government’s approach to tapering JobKeeper payments will be well received by many and is what we had suggested to enable affected businesses to adjust in an orderly way.”
“The advance notice is welcomed as many businesses will require professional advice to determine the best course of action and what they might need to do to requalify.
“The orderly withdrawal of JobKeeper also gives many businesses extra time to reboot and permanently change the way they operate, just as consumers have changed how and when they buy goods and services,” Kasapidis said.
The Jobkeeper payment post September will change from a flat $1500 per fortnight to a two-tier system.
Under the new supplement scheme post September, full-time workers, instead of $1500a fortnight will now receive $1200 per fortnight. Part-time employees who worked less than 20-hours a week (prior to March 2020) will get $750/fortnight rather than $1500/fortnight. This will be applicable for the period from September 28 to January 3, 2021.
From January 4 to March 28, 2021, the payments under Jobkeeper will continue but further reduce. For full timers, the payment per fortnight will be $1000 instead of $1200 and for part-time workers it will reduce to $650 per fortnight.
Prime Minister Scott Morrison has revealed that the Federal Government’s JobKeeper program will run at a reduced rate for another six months from the end of September, while JobSeeker will continue for at least another three with a strong expectation for it to be further extended till March 2021.
Payments under the re-branded Newstart called JobSeeker will also be reduced. When launched the re-branded Newstart or Jobseeker payment was jacked up by $550 per fortnight. Come September, that increment will be cut by $300 to $250 per fortnight bring the fortnightly payment down to $800.
To ease any pain caused by the reduction of $300 per fortnight in the payment, the government has increased the ‘income-free’ area to $300. That simply means workers can work and earn wages to that amount without affecting their payments.
The government no doubt will be looking at the supplement programs more closely and make further announcements as the situation evolves.
“We will make further decisions about JobSeeker at closer to the end of the year or potentially even in the budget,” Mr Morrison said.
“It is our intention that we would expect that there would be likely a need to continue those supplements post-December.”
Mutual obligations for JobSeeker have also been reinstated, with recipients required to look for at least four jobs a month, starting from August 4 – when millions of people in Melbourne will still be in lockdown.
Commenting on Jobkeeper 2.0, Employsure Managing Director Ed Mallett said, “This extension of JobKeeper and the IR flexibility that comes with it, will give small business owners a sense of certainty to move forward and make smart employment decisions into 2021.
“Our main advice to business owners right now is to fully understand the details of the amended scheme, its potential repercussions and to get professional advice on how to implement it across their business.”
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