The government recently extended the JobKeeper payment, allowing businesses to be supported by an additional six months. This initiative was originally scheduled for September 27, 2020. However, it will remain open to eligible businesses, the self-employed and non-profit organizations until March 2021.

Aside from the renewal, another pertinent change to be mentioned is the employee’s increased fitness. Previously, the relevant hiring date was August 3, 2020. It now goes from early March to July 2020. Other changes, including the payout percentage, are covered in this blog post. Read on for more information.

JobKeeper benefits are expanding

In early July, we posted an article on JobKeeper, detailing the scheme and how it affects taxes. You can find it here. A month later, the Treasury updated the fact sheet on the extended scheme. Shortly afterwards, on August 14, the treasurer registered change rules called Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 7) 2020. It changed the employee’s eligibility reference date, giving companies more opportunities to get the support they need. The new date is now from March 1, 2020 to July 1, 2020, effective August 3, 2020.

The government has announced that the ongoing COVID-19 crisis has resulted in many more companies and workers being hit by a financial crisis. For this reason, the JobKeeper payment schedule will be extended until March 28, 2021, instead of the previously indicated end date, which is September 27, 2020.

The expanded schedule consists of 13 fourteen days with the proposed extension to double the length of the original system. Effective September 28 of this year, the following will take effect:

A two-tier payment percentage is used, which is based on the average working hours per week.

The last two-week payment was $ 1,500. The new one will be lower at the start of the extension and shortened further on January 4 next year.

A retest of the decline in turnover will take place every quarter.

The reduction in the turnover test is applied on the basis of the GST turnover.

The treasurer spoke about the further changes on August 7, 2020. The purpose of the changes is to increase access to the JobKeeper scheme by extending from September 28 to March 28. The main cause of these changes is the ongoing crisis and the phase 4 business restrictions that have been introduced in various parts of the country.

The revisions state that entities no longer have to endure the quarterly decline in the revenue test for several quarters. Instead, they only have to absorb the previous quarter’s decline.

More changes revealed

Another important change is the date the employee is eligible. As of August 3, the date has been moved from March 1, 2020 to July 1, 2020. This reference date applies to the last four weeks of the scheme, together with the extended term. It means those hired after March 1 can take advantage of JobKeeper payments.

The same press release mentioned above also reported the possible results of the revisions, including:

There’s a huge jump from $ 101.3 billion to $ 15.6 billion in additional costs.

The extensive scheme will be applied nationally.

In the quarter of September 2020, approximately four million people will be eligible for the benefit.

The number will have dropped to more than two million by December.

In March there will be only 1.75 million eligible persons.

To better understand the changes, we have listed the changes below, starting with the qualified employees. The eligibility criteria for companies and employees have changed from Monday, August 3, 2020:

The employee entered service from 1 March to 1 July, including those who have been reassigned and resigned.

From 1 July, the employee must be at least 18 years old, study independently and not full-time.

As of the same date as above, the employee must be part of the company, both part-time and full-time. Casual employees are only eligible if they have been with the company for a few years.

Only Australian residents are qualified which means they are considered by law to be an Australian citizen for social security purposes. Tax residents are also allowed, as are those who hold a subclass 444 visa.

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The person must know the employer and agree to be nominated as an eligible employee.

And last but not least the person is only eligible if he does not receive paid parental leave from the government. The same rule applies to people on disability benefits.

Now let’s talk about payment rates. In the previous pre-renewal scheme, the rate was $ 1,500, which was given to employees every fortnight. Note that the payment percentage is the minimum amount that the employer must pay the eligible employee. It is a flat rate, unaffected by the person’s working hours.

Meanwhile, in the expanded scheme, the payment rate is divided into two tranches:

From September 28, 2020 to January 3, 2021, the employee will receive $ 1,200 every fortnight or $ 750 every fortnight for the partial rate.

From January 4, 2021 to March 28, 2021, the full rate is $ 1,000 every two weeks and $ 650 for the partial rate, which is also awarded every two weeks.

In the expanded scheme, a distinction is now made between the different types of employees via the dual remuneration system. In the previous scheme, the minimum compensation was the same for full-time, part-time and casual employees.

But the two tier system applies to employees based on their working hours per week. The reference period for this system is the payment terms of four weeks before 1 March or 1 July. For employees who qualify before March 1, 2020, can use the pay period with the higher number of hours worked. The new levels work as follows:

If the employee has worked in a company for a minimum of 20 hours per week, he may be eligible for the full rate. Companies must be active for 20 hours or more weekly to be eligible.

The partial rate applies to an employee who did not meet the 20-hour requirement but was still actively engaged in his position or company during the reference period referred to.

Many employees have experienced a decrease in their working time due to COVID-19. If you are one of them and your working hours have fallen from 20 hours per week to less than this number after February or June 2020, you can still claim your full continued payment rate. However, companies are not eligible for the full rate if they have worked less than 20 hours per week on average before March to July 2020.

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