What does JobKeeper 2.0 mean for you and your business?

Need help wrapping your head around the new JobKeeper payment updates? Or perhaps you’re wondering how the overhaul will impact you, your employees and your business?  

The Federal Government has announced that that the JobKeeper payment, which was originally due to run until 27 September 2020, will now continue to be available for eligible businesses until 28 March 2021. 

From the first week of October, the payment will be reduced, and a new, two-tiered system will be introduced to separate part-time and full-time payments. The overhaul will also feature tighter eligibility requirements for businesses to receive the subsidy.

What are the new JobKeeper 2.0 changes?

• The JobKeeper wage subsidy has been extended until March next year.
• Allowances for full-time workers will fall from $1,500 to $1,200 a fortnight from 28 September 2020 and to $1,000 per fortnight from 4 January 2021. 
• Allowances for part-time workers who work less than 20 hours a week will fall from $1,500 to $750 a fortnight from 28 September 2020 and to $650 per fortnight from 4 January 2021. 
• Businesses will need to be retested and re-qualify to remain eligible for payment subsidies. 

The following table provides an overview of the changes to JobKeeper for each remaining quarter of the program:

What do these changes mean for your business?

Employers and businesses will need to retest their GST turnover prior to lodgement of their September and December quarter Business Activity Statements (BAS).

The turnover test will look at actual turnover decline as opposed to projected GST decline.

From 28 September 2020 onwards, all businesses will need to re-qualify and demonstrate relative decline in the previous quarter in comparison to the relative 2019 quarter. For more information on this, click here. 

If you have any concerns or questions about how these COVID-19 changes will impact your business day to day, contact your small business accountant today. 

Why is it changing from a flat-rate scheme?

The Government emphasised the need for a dynamic response to the virus with the initial JobKeeper scheme being established at the height of COVID-19’s outbreak.

JobKeeper 2.0 is designed to better reflect pre-COVID incomes. This comes in light of announcements that 25% of employees received an increase in income under JobKeeper. The tiered system is also designed to incentivise employees to work more hours.

What has JobKeeper achieved so far?

• JobKeeper payments have been processed for 3.5 million Australian workers and 960,000 businesses.
• The treasury review found that the subsidy was well targeted and effective in reducing business closures and job loss.
• Tuesday's press conference emphasised that JobKeeper protected Australia’s social security and Centrelink systems from crashing by centralising income support.
• The scheme also provided Australians with immediate support to buy time to facilitate the dual system which is now being launched.

If you have any questions, please contact your local Kelly+Partners office today. 

You can also request a call back at a time that suits you 

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