JobKeeper 2:0 to last until March at a lower rate

The Federal Government has outlined the changes it will make to its JobKeeper program ahead of a budget update this week.

Due to expire until the end of September, the wage subsidy scheme will be overhauled and extended until March.

Among the key changes are tighter eligibility requirements and a lower payment capped at $1200 rather than the flat rate payment of $1500 a fortnight. Those working fewer than 20 hours a week will receive $750.

The payments will fall again to $1000 a fortnight, and $650 a fortnight for people working fewer than 20 hours, for the first three months of 2021.

Eligibility will also be tightened, with businesses required to have more frequent turnover-reporting requirements, to prove ongoing financial distress.

Previously a business had to prove a drop in turnover of 30 or 50 per cent, depending on the size of the business, to get the subsidy for a full six months.

“The review of JobKeeper found that the program has been well targeted to those businesses that suffered an average decline in turnover in April of 37 per cent compared to the same month last year,” said Finance Minister Mathias Cormann.

“What the review also found was that there were a number of features of JobKeeper that created adverse incentives which may become more pronounced over time as the economy recovers. This formed part of our considerations as we looked at the next phase of the JobKeeper program.

“The Government recognises the need for JobKeeper to be extended, we are conscious that there will still be businesses that will continue to be severely impacted by the coronavirus crisis. But we also want to ensure that ultimately we can transition businesses back into a situation where they are able to pay for the wages of their employees out of their income.”

Australian Tourism Export Council  managing director Peter Shelley said businesses would be grateful for the extended support.

“This extension will give tourism operators the security of knowing they can plan about retention of staff and management of resources moving forward as they attempt to navigate a difficult period between now and when the international borders re-open,” he said.

“Tourism businesses have been hit hard this year not just by COVID, but by bushfires, drought, floods – but they want to get back to business and are waiting eagerly to welcome back their international visitors. Having skilled staff ready and waiting to go will be a critical factor in the speed of their rebuild.”