Jobkeeper Splits in Two: What Does it Mean for Your Business?
As the Government unveils its revised Jobkeeper and Jobseeker supplements, we explore what it means for your business.
The Australian Government has announced changes to its Jobkeeper and Jobseeker subsidies, which have been extended until March 2021 at reduced rates with tighter eligibility criteria, with an expected cost of $86 billion. The announcement will ease concerns about a cliff in September, when the subsidies were due to end.
With more than 960,000 businesses currently enrolled in the program, the government's expectation is that the number of businesses enrolled will decline as the new eligibility requirements are applied.
So what does this mean for your business?
Jobkeeper: A Two-Tier Approach
Jobkeeper will now be available to employers in two tiers, based on the hours they worked in February 2020:
- The higher tier pays $1200 per fortnight for employees that work more than 20 hours per week, paid until January 3, 2021 after which it will reduce to $1000 per fortnight.
- The lower tier pays $750 per fortnight for employees that work less than 20 hours per week, paid until January 3, 2021, when it will reduce to $650 per fortnight.
Minimum wage conditions will still apply, which means that employers must continue to pay the same rate to their employees.
Revised eligibility criteria will apply, with government to re-test eligibility in September and again in January. The tests will still require businesses to prove a 30% decline in turnover for both the June and September quarters, rather than forecast a decline. The turnover criteria will also apply for the December quarter to remain eligible for Jobkeeper until March 28, 2021.
Stay on the right side of the ATO
While the scaled back Jobkeeper payments will likely give some businesses a breather, one area that should remain in focus is ensuring that they remain compliant. The ATO has fired a shot across the bow about fraud and scheme activity designed to take advantage of the program.
We highly recommend working with your accountant to ensure that your business meets both the turnover tests and that your employees are eligible for the payments as business recovers or your employee mix changes.
Contact us on 02 9957 4033 for more information.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.