Later last month, the government announced to extend JobKeeper Payment by six months to 28 March 2021 and the JobSeeker Payment to 31 December 2020. The extension is aiming to build up the confidence for economy recovery and continue to support the business and community. However, the government also make eligibility stricter for the sake to only provide assistance to individuals and businesses who are indeed highly impacted.
Changes of the extended JobKeeper
Two phases payment
From 28 September 2020 to 3 January 2021, Jobkeeper Payment will be:
- $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or Not-For-Profit 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; and
- $750 per fortnight for other eligible employees and business participants.
From 4 January 2021 to 28 March 2021, JobKeeper Payment will be:
- $1000 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or Not-For-Profit 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; and
- $650 per fortnight for other eligible employees and business participants.
Eligibility of employees stays the same as before, for more information please refer to our article The Second and Third Stimulus Package Plan – Which One Suits You.
Turnover Test for Extended JobKeeper
To be eligible for the extended JobKeeper Payment, business and Not-For-Profit are required to meet the current turnover test and in addition, they need to prove their actual turnover has been continuously significantly dropped down in the testing period. They have to apply and satisfy the requirements again in October 2020 and January 2021.
Business and Not-For-Profit need to demonstrate they have experienced a decline in turnover for June 2020 quarter (April, May, June) and September 2020 quarter (July, August, September) compared to the relevant quarters (usually the same quarter of last year) for the period 28 Sep 2020 to 3 Jan 2021 JobKeeper payment.
Similarly, to be eligible for the JobKeeper under the extension period 4 Jan 2021 to 28 Mar 2021, businesses and Not-For Profit should prove their actual turnover for June, September and December quarters 2020 are dramatically reduced compared to the relevant quarters (usually the same quarter of last year).
Test for decline in turnover remains the same, for more information please refer to article The Second and Third Stimulus Package Plan – Which One Suits You.
Changes of the extended JobSeeker
The temporary Coronavirus Supplement has also been extended from 25 September 2020 to 31 December 2020. However, the payment has been adjusted aligning with the gradually improved economy. The government will simultaneously update the associated policy to guide those people become more active in job seeking.
Changes to the payment
From 25 September 2020 to 31 December 2020, the Coronavirus Supplement per fortnight will be reduced from $550 to $250. Effectively the JobSeeker payment rate will now be reduced from $1100 to $800 per fortnight.
The income free threshold to people on JobSeeker and Youth Allowance (other) will be increased from $106 for JobSeeker Payment and $143 for Youth Allowance (other) to $300 per fortnight for both and a phase out rate of $0.6 in every dollar of income over $300.
Eligibility for the payment will be changed too from 25 September 2020 to ensure the assistance has been delivered to people who need most as the economy recovers.
- Means Testing – from 25 September 2020, means testing will be put in place in the following ways:
- Asset testing for all payment for both existing and new recipients
- the Liquid Assets Waiting Period (LAWP) for all payments will be reinstated
- Partner income testing – from 25 September 2020, the partner income testing cap will be increased to $3086.11 per fortnight or $80238.89 per annum for individuals with no personal income. The taper rate will jump to $0.27 from $0.25, with the higher income cut-out a result of changes to income testing for JobSeeker Payment.
- Expanded Criteria – JobSeeker Payment and Youth Allowance (other) criteria will continuously assist permanent employees who are stood down or lose their employment and sole traders, self-employed, casual workers and contractors who meet other tests until 31 December 2020.
From 4 August 2020, a mutual obligation requirement (temporarily suspend from 24 March 2020 to 8 June 2020) will be reintroduced, whereby jobseekers are required to undertake FOUR job searches a month. The penalty will apply to those who reject a job without a legitimated reason that has been provided through the program.
The reduced JobKeeper Payment may make some JobKeeper recipients entitled to JobSeeker Payment too. Therefore, the total benefits of extended JobKeeper recipients received may not necessarily reduce much. People who are affected may need to pay attention to the government on any further changes to JobKeeper and JobSeeker.
At Pitt Martin, we are here to be with you through this pandemic. Since the JobKeeper Scheme is released, we have announced to provide FREE assessment on the eligibility for the businesses. Please feel free to click the social media button on top to share this article with your friends and the ones around you to help more people in need.
Experienced Partner with a demonstrated history of working in the accounting industry. Skilled in Tax, Accounting, Business Advisory and SMSF. Strong entrepreneurship professional with qualification Master of Professional Accounting, CPA Public Practice, Registered Tax Agent, NSW Law Society External Examiner and Limited AFS License. Specialised in SME, tax planning and international tax, he helped client save ample money and create wealth.