To the relief of many Australians, the JobKeeper Payment has officially been extended by a further six months.
Originally set to finish on 27 September 2020, the Australian Government will continue JobKeeper until 28 March 2021.
This is huge for the eligible businesses, not-for-profits and those self-employed who are still feeling the financial pain of COVID-19.
It’s predicted that a lot of Australians will continue to endure these struggles, with 1.4 million people expected to be on JobKeeper between October and December this year, and 1 million during the first three months of 2021.
However, the extension does come with several changes for employees, businesses and not-for-profits seeking to continue claiming JobKeeper, which will come into play from 28 September 2020.
If you’re facing financial challenges but haven’t yet applied for JobKeeper, it’s still not too late. The new scheme is also extended to new recipients, providing you can meet both the existing and additional eligibility requirements during the extension period.
Main changes to the JobKeeper payments
The current fortnightly payment rate of $1,500 for eligible employees and business participants will see two reductions over the next six months.
The payments will also be split into two tiers, including:
– one for full-time workers or those working, on average, 20 hours or more per week in February this year, and
– one for part-time workers or those working, on average, less than 20 hours per week in February this year.
Between 28 September 2020 and 3 January 2021, the payment will reduce to $1,200 for full-time workers and $750 for part time workers.
Between 4 January 2021 and 28 March 2021, the fortnightly payments will further reduce to $1,000 for full-time workers and $650 for part-time workers.
You will also be required to nominate which payment rate you’re claiming for each eligible employee and business participant.
The Government has implemented stricter tests to determine your eligibility for JobKeeper payments.
As a reminder – to be eligible, you will need to show that a turnover decline of:
- 50% for those with an aggregated turnover over $1 billion,
- 30% for those with an aggregated turnover of $1 billion or less, or
- 15% for Australian charities and not-for-profit commission-registered charities
For the extended period, you will need to reapply your decline in turnover test on 28 September 2020, and again on 4 January 2021.
Update: on 7 August 2020, the government announced an easing of the JobKeeper criteria.
Businesses will now only need to show that their GST turnover had dropped over one quarter, instead of multiple, to be eligible for the updated scheme.
Workers will also qualify if they were employed on July 1, instead of March 1.
What remains unchanged?
Please note, any other eligibility rules for businesses and not-for-profits remain the same, along with all eligibility rules for employees wanting to claim JobKeeper.
Full details and fact sheets are available here.
There’s never been a more important time to work closely with your accounting and financial planning team. We’re happy to guide you through the process. Contact the team at Nitschke Nancarrow now.
Please note the government are continually updating us with information, so this is based on the information at hand today. We would suggest keeping an eye on the media for any additional support that may come out in the future and be of benefit to you.
The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.