Prime Minister Scott Morrison has confirmed JobKeeper will be extended until March 2021, at a lower rate and with tighter eligibility requirements.
Also read: ASX rises on major JobKeeper announcement
Businesses will be required to meet tougher new turnover rules, while employees will also receive different payments depending on their hours, the government has confirmed after revealing the findings of a review into the major subsidy program.
New eligibility rules for businesses and sole traders
Previously, businesses and sole traders with a turnover of less than $1 billion were required to prove a reduction in turnover of at least 30 per cent, and a reduction of 50 per cent for businesses larger than that.
Under the new phase of JobKeeper, businesses will need to re-qualify under the same tests. Previously, businesses only needed to prove they met the requirements once.
This new eligibility test is different largely in that support payments will depend on actual turnover decline, rather than prospective turnover decline, which was how the first six months of the scheme was delivered.
The fresh turnover tests will be reapplied at the end of September and at the beginning of January 2021.
This means an employer will need to prove their turnover had declined at least 30 per cent in the June and September quarters to receive the JobKeeper payment in the December quarter.
Then, they will be required to prove that their turnover fell in the December quarter to receive the payment in the March 2021 quarter.
“Businesses will have the test reapplied in relation to their turnover and it will be looking at their performance over this first six month period of the program and that will provide where it's needed - the gateway into the next phase of the program,” Morrison said.
New payment rules for workers
The Treasury review found around one-in-four Australians on JobKeeper were receiving a pay rise of, on average, $550 per fortnight. That’s a $6,600 pay rise over six months, at a cost of $6 billion.
The new JobKeeper scheme will attempt to stop the pay rises and tie income support more closely to hours worked.
“It was a conscious decision to introduce the flat $1,500 payment as it enabled us to get money to people who needed it most as fast as possible. However, one of the consequences of the flat payment equivalent to minimum wage was that some recipients were receiving more under JobKeeper than they were pre-Covid. The two-tiered payment better reflects the pre-Covid income of these recipients,” Federal Treasurer Josh Frydenberg said.
All eligible Australians will continue to receive the JobKeeper subsidy of $1,500 a fortnight, until 27 September.
Under the JobKeeper 2.0, Australians working fewer than 20 hours a week will, after 27 September, receive a reduced JobKeeper subsidy of $750 per fortnight.
And Australians working full time will also receive a reduced JobKeeper subsidy of $1,200 per fortnight.
From the March quarter, the payments to eligible workers will be reduced again.
That means that the payment will be reduced to $1,000 per fortnight for full time workers, and $650 for those working less than 20 hours a week.
JobKeeper rates from 28 September 2020 to 28 March 2021
Full rate per fortnight
Less than 20hrs worked per fortnight rate
28 September 2020 to 3 January 2021
4 January 2021 to 28 March 2021