The information contained in this article is current as at 29 July 2020 and may no longer be up-to-date. To view information on the latest coronavirus updates, please visit our COVID-19 Updates, Webinars and Resources page or alternatively contact us on (03) 9560 2922 for further information on any recent changes.
The Federal Government has announced its much anticipated plans for JobKeeper post-27 September 2020 when the scheme was originally scheduled to expire.
JobKeeper is the centrepiece of the Federal Government’s economic response to the COVID-19 pandemic, and has been instrumental in supporting over 920,000 businesses and not-for-profit organisations, as well as around 3.5 million workers, face the challenges of COVID-19.
With the COVID-19 pandemic far from over, it is not a surprise that the Government is continuing to provide support to businesses and workers. However, the Government has been clear that the scheme is temporary, and we are seeing a gradual winding back of the payments and a tightening of eligibility criteria.
The key changes
The key changes to the JobKeeper scheme are as follows:
- The JobKeeper payments will be extended for another six months, until 28 March 2021.
- Employers will need to re-assess their eligibility for JobKeeper in each of the two quarters of the extended JobKeeper period. For businesses with less than $1 billion turnover, they will need to show that they have suffered a 30% reduction in turnover compared to their pre-COVID-19 turnover (15% for charities). Eligibility for the December 2020 quarter will depend on businesses showing they have suffered the required reduction in turnover in the June 2020 quarter, and the September 2020 quarter. A business’s eligibility in the March 2021 quarter will depend on the business having suffered the required reduction in turnover in the December 2020 quarter.
- There will be two classes of employees – those that worked 20 hours or more per week as at 1 March 2020, and those that worked less than 20 hours per week as at 1 March 2020. An employee’s hours of work will be calculated by taking the average of the four weekly pay periods prior to 1 March 2020. Those employees that worked 20 hours or more will receive the full JobKeeper payment, while those that worked less will receive a reduced rate.
- The JobKeeper payments are being scaled back from the $1,500.00 per fortnight per employee. The new pay rates will be as follows:
These changes need to be legislated, but we expect that the Parliament will approve the changes when it next sits.
We are waiting on some of the finer details of how the changes will work, including how an employee’s pre-1 March 2020 hours of work is to be calculated if they were on leave or had an atypical pattern of work hours (e.g. fly-in fly-out workers). We expect the ATO will provide guidance in the near future.
One question that employers have asked us is whether the scheme will be extended to more employees, such as employees employed after 1 March 2020. At this stage, it appears that only existing employees that were employed at 1 March 2020 and are already eligible for JobKeeper will continue to be eligible from 28 September 2020.
Employers should start considering now whether they will meet the new eligibility criteria from 28 September 2020 and plan accordingly. Employers that do expect to continue qualifying will need to factor in the reduced rates that they will receive on behalf of their employees that are earning wages in excess of the JobKeeper payments.
How can Sharrock Pitman Legal help?
If you have any further queries about JobKeeper and how these changes will impact your business, please feel free to get in touch. Contact our employment lawyers on 1300 205 506 and we will be happy to assist.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
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For further information contact
Samuel is a Legal Practitioner at Sharrock Pitman Legal.
He deals with areas of Commercial Law, Employment Law and Charities & Not for Profit Law. For further information, contact Samuel on his direct line (03) 8561 3316.