Economic Update and JobKeeper 2.0: What you need to know?

 

On 21 July 2020, the Government has announced the future of JobKeeper after reviewing its jobs during this COVID-19 situation.

The two main important updates are:

• All the current JobKeeper schemes will remain until 27 September 2020, and
• JobKeeper payments will be extended by a further six months to 28 March 2021 with an aim of flatting it out gradually.

JobKeeper 2.0 – targeted, tiered and temporary

As the first phase of JobKeeper was targeted to support payments to individuals and businesses as fast as possible during COVID, the second phase of JobKeeper will be much tighter on the payments and qualification criteria.

1. For businesses, the turnover test needed to be qualified for each quarter:

Quarters	Criteria
To qualify for the December 2020 JobKeeper	Businesses must meet the decline in turnover test for each of the June and September 2020 quarters.
To qualify for the March 2021 JobKeeper	Businesses must meet the decline in turnover test for each of the June, September, and December 2020 quarters.

 

2. For individuals, the flat $1,500 payments will be replaced by a new two-tiered payment system:

Timeframe	20+ hours per week	<20 hours per week
Until 27 September 2020	$1,500 a fortnight	$1,500 a fortnight
From 28 September 2020	$1,200 a fortnight	$750 a fortnight
From 4 January 2021	$1,000 a fortnight	$650 a fortnight

 

What’s next if you’re no longer eligible?

Businesses who are currently receiving JobKeeper and unfortunately will not be eligible going forward, must ensure that they are looking at their cash flow and make essential alterations to avoid any future shocks or restrictions.

This pressure on businesses has been recognised by the Government and reveals plans to expand their SME Guarantee Scheme – raising the loan cap from $250,000 to $1 million and would benefit up to 3.5 million firms as the scheme switches from working capital to investment loans.

Reduced JobSeeker, still at a rate higher than pre-COVID

JobSeeker payments which is due to end on 27 September will now be extended until December 2020. However, there will be a reduction in the amount from $550 a fortnight to $250 coronavirus supplement – making the JobSeeker rate at a maximum of $815.

Furthermore, JobSeeker income threshold will be increased to $300 which represents a person’s earnings per fortnight without impacting on payments.

As part of mutual obligation requirements for people on JobSeeker, they need to undertake four job searches a month that will commence on 4 August. These mutual obligations will increase and the government will initiate an asset test for payments eligibility from the end of September. However, eased eligibility requirements for sole traders on JobSeeker will remain in place, as will the waiving of the ordinary waiting period.

Certainly, by the end of the year, further decisions relating to JobSeeker may be made.

 

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