The JobKeeper Payment extension offers welcome relief for many Australian workers suffering the stress of employment uncertainty
On 21 July 2020, Prime Minister Scott Morrison and Treasurer Josh Frydenberg confirmed that both forms of JobKeeper payments will be extended to 28 March 2021. This is a six-month extension beyond the original termination date of 27 September 2020.
On 7 August 2020, the Australian Government announced further amendments to the extension in an attempt to relax the eligibility requirements.
While this is a welcome relief for both employers and employees, there are many questions surrounding the application of the JobKeeper Payment extension and who will qualify.
The JobKeeper Payment extension is also known as JobKeeper 2.0.
What are the main features of the JobKeeper Payment extension?
The changes divided the JobKeeper Payment (after 27 September 2020) into a two-tiered system:
- Operates from 28 September 2020 to 3 January 2020
- Payments for full time workers will be reduced to $1,200 fortnightly
- Payments for part time workers will be reduced to $750.00
- Operates from 4 January 2021 to 28 March 2021
- Payments for full time workers will be reduced to $1,000 fortnightly
- Payments for part time workers will be reduced to $650.00 fortnightly
Importantly, from 3 August 2020, the relevant date of employment to be eligible for JobKeeper will now move from 1 March 2020 to 1 July 2020, which is aimed at increasing the eligibility for the extension of the JobKeeper scheme. This means that employees who were hired after 1 March 2020 may now be eligible for JobKeeper payments.
Under the tiered system, the following definitions have now been applied by the Government:
Full time workers
Employees who have worked an average of 20 hours or more a week in the reference period.
Part time workers
Employees who have worked an average of less than 20 hours a week in the reference period.
Employees who have been a long-term casual, that is, who have been employed on a regular and systematic basis by their employer until 1 July 2020 and who will be paid based on the average hours worked per week in the same period, that is, depending on whether the hours worked were more or less than 20 hours a week.
What happens after 28 September 2020?
From 28 September 2020, businesses will be required to re-assess their eligibility for the JobKeeper extension with reference to their actual turnover in each relevant quarter compared to the comparative year (rather than projected GST turnover).
For a business to meet the test under tier 1, it must show that its actual GST turnover declined in the September quarter 2020.
For a business to meet the test under tier 2, it must show that its actual GST turnover declined in the December quarter 2020.
Put simply, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:
- 50 % for those with an aggregated turnover of more than $1 billion
- 30 % for those with an aggregated turnover of $1 billion or less
- 15 % for not-for-profit organisations
The final word
While the JobKeeper Payment extension offers a continued safety net for Australian workers, the payment reductions is a clear message that the scheme is unlikely to continue indefinitely. Right now – it is important to understand how JobKeeper may apply to you and impact your business.
This article was written by Litigation Lawyer, Zoe Fatouros.
DISCLAIMER: We accept no responsibility for any action taken after reading this article. It is intended as a guide only and is not a substitute for the expert legal advice you can get from marshalls+dent+wilmoth and other relevant experts.