On 21 July 2020, the Government announced the extension of the JobKeeper wage subsidy scheme (previously due to expire on 27 September 2020) and a temporary boost to the JobSeeker unemployment benefit program.
- From 28 September 2020 to 3 January 2021, the $1,500 per fortnight JobKeeper payment will be reduced to $1,200 per fortnight for full-time workers and $750 per fortnight for people working ≤ 20 hours a week; and
- From 4 January 2021 to 28 March 2021, these payments will be revised down again to $1,000 per fortnight for full-time workers and $650 per fortnight for those working ≤20 hours a week.
The JobKeeper scheme turnover tests will remain the same, however businesses will need to satisfy them again both in October 2020 and January 2021.
The temporary boost to the JobSeeker program will also now be available until the end of this year at a reduced rate and with additional eligibility criteria.
From 25 September 2020 until 31 December 2020, the $550 per fortnight Coronavirus supplement, which effectively doubled the fortnightly income support payment, will be reduced to $250. The JobSeeker payment rate will now be reduced from $1,100 to $800 per fortnight.
If these measures are applicable to your circumstances, or if you would like further information in relation to any of the above, please contact your Armada Client Manager.
Full details of the changes to both the JobKeeper Scheme and JobSeeker Scheme follows.
Changes to JobKeeper Scheme
On 21 July 2020, Treasury released updated information available here on the JobKeeper Scheme.
The current $1,500-a-fortnight JobKeeper payment rate will be replaced with a new two-tiered rate system:
- one full time-time employees, and;
- the other for part-time and long term casual employees.
The 20 hours per week test refers to those employees who were working in the business for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020.
Eligibility for employees remains the same. Refer to previous Armada Emails or ring your Client Manager for details.
The JobKeeper Scheme turnover tests will remain the same, however, businesses will need to apply and satisfy them again at the beginning of October 2020, and again at the beginning of January 2021.
To be eligible for ongoing JobKeeper assistance businesses will need to pass the relevant decline in turnover rates as follows:
Businesses and not-for-profits seeking to claim the JobKeeper Payment will be required to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover).
If a business or not-for-profit does not meet the additional turnover tests for the extension period, this does not affect their eligibility prior to 28 September 2020.
The Commissioner of Taxation will have the discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019, in line with the Commissioner’s existing discretion.
Changes to JobSeeker Program
On 21 July 2020, the Government announced an extension of the JobSeeker benefit. However, it has also simultaneously imposed rules to restrict the eligibility, as well as gradually reintroducing obligations for payment recipients to seek work. Treasury released updated information available here on increased income support.
From 25 September 2020 until 31 December 2020, the $550 per fortnight coronavirus supplement, which effectively doubled the fortnightly income support payment, will be reduced to $250.
Effectively the JobSeeker payment rate will now be reduced from $1,100 to $800 per fortnight. The Government will also increase the income threshold to people on JobSeeker to $300. The income free area for JobSeeker Payment and Youth Allowance (other) will increase from $106 per fortnight for JobSeeker Payment and $143 per fortnight for Youth Allowance (other) to $300 per fortnight for both and a phase out rate of 60 cents in every dollar of income over $300.
Access to payments
Access to payments will change from 25 September 2020 to ensure appropriate targeting of income support as the economy recovers.
- Means testing — From 25 September 2020, means testing will be reinstated in the following ways:
- asset testing for all payments will be reinstated, for both existing and new recipients; and
- the Liquid Assets Waiting Period (LAWP) for all payments will be reinstated.
- Partner income testing — the partner income test cut-out will increase to $3,086.11 per fortnight, or $80,238.89 per annum, for individuals with no personal income, from 25 September 2020. The taper rate will increase from 25 cents to 27 cents, with the higher income cut-out a result of changes to income testing for JobSeeker Payment. No one will be worse off under these temporary changes.
- Expanded criteria — JobSeeker Payment and Youth Allowance (other) criteria will continue to provide payment access for permanent employees who are stood down or lose their employment and sole traders, the self-employed, casual workers and contract workers who meet the income and assets tests until 31 December 2020.
From 4 August 2020, there will also be a mutual obligation requirement where those seeking employment will need to undertake four job searches a month.
The penalties regime will apply if people refuse a job that has been provided and offered through that process.
Changes to the JobKeeper Payment may make some recipients of that payment also eligible for the JobSeeker Payment or other income support payments.
The Government is making further changes to income support arrangements for JobKeeper Payment recipients who transition onto income support.
If you have any questions regarding the above, please contact our office (08) 6165 4000