JobKeeper and JobSeeker Changes You Need to Know

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The JobKeeper and JobSeeker Payment schemes are introduced by the Australian government and administered by the Australian Taxation Office (ATO) to assist employers and employees who have been significantly impacted by the coronavirus pandemic.

While the JobKeeper provides a temporary subsidy for businesses owners to continue to pay their workers, the JobSeeker grants an additional $550 per fortnight to eligible employees.

Launched in March 2020 when the country was forced under lockdown to contain the spread of COVID-19, both programs were due to wrap up in September 2020, when the country would hopefully beat the crisis.

However, on 21 July 2020, the Federal Government announced an extension on the JobKeeper payment scheme. From the original end date of 27 September 2020, it was extended by six months until 28 March 2021. The eligibility for the extended JobKeeper program would be based on actual turnover in the relevant periods. The payment would also be stepped down and paid at two rates.

Meanwhile, the JobSeeker coronavirus supplement has been extended to the end of the year along with new mutual obligation requirements.

JobKeeper Payment Extension

  • The government will continue to provide the $1,500 fortnightly wage subsidy until 27 September 2020.
  • From 28 September to 3 January 2021, the subsidy for full-time workers, sole traders, and business participants (partner in a partnership, adult beneficiary of a trust, shareholder or company director) who work 20 hours or more a week will be reduced to $1,200 while those who are working less that 20 hours will receive $750.
  • From 4 January 2021 to 28 March 2021, the subsidy will be further reduced to $1,000 for full-time workers and business participants and $650 for the part-timers.
  • Businesses with a turnover of less than $1 billion will have to reapply for the program at both stages and must have a 30% drop in revenue to be eligible.
  • Businesses with more than $1 billion in turnover must demonstrate a 50% fall.


Reduced Rate

The reduced JobKeeper Payment will be paid at two rates:

From 28 September 2020 to 3 January 2021, the fortnightly wage will be:

  • $1,200 for employees of business or not-for-profit who worked at least 20 hours a week and sole traders or business participants who were engaged in the business for the same minimum number of hours. Both must have rendered these hours in the four weeks before 1 March 2020.
  • $750 for employees and business participants in the business or not-for-profit organisations who have rendered less than 20 hours per week in the four weeks before 1 March 2020.

From 4 January 2021 to 28 March 2021, the fortnightly wage will be:

  • $1,000 per fortnight for employees and business participants who were working or actively engaged in business for 20 hours or more a week on average in the four weeks before 1 March 2020
  • $650 per fortnight for employees and business sole traders who were working or actively engaged in business for less than 20 hours a week on average in the four weeks before 1 March 2020.


Eligibility

Aside from the reduced rate, eligible applicants will also need to meet a series of new conditions to do so. From 28 September 2020, businesses and not-for-profits seeking to claim JobKeeper payments will be required to reassess their eligibility for the JobKeeper extension regarding their actual turnover in the June and September quarters 2020.

  • Businesses and not-for-profits will need to demonstrate that they have met the relevant continuing decline in turnover test in both of those quarters to be eligible for JobKeeper from 28 September 2020 to 3 January 2021.
  • Businesses and not-for-profits will need to further reassess their eligibility in January 2021 for the period from 4 January to 28 March 2021.
  • Businesses and not-for-profits will need to demonstrate that they have met the relevant continuing decline in turnover test in each of the previous three quarters to remain eligible for the March 2021 quarter.

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JobSeeker Updates

  • The elevated unemployment benefit will remain at $1100 a fortnight until September 27
  • From that date until the end of the year the $550 coronavirus supplement will be cut by $300 to make the overall fortnightly payment $800
  • People will be able to earn up to $300 without having their payment reduced
  • The mutual obligation rules requiring people to search for four jobs a month will restart on August 4
  • Penalties for people refusing a job offer will be reintroduced
  • Job search requirements will increase in September when the assets test will also return
  • The permanent JobSeeker rate to take effect from January next year will be announced in the October 6 budget.


Eligibility Requirements

Starting on 4 August 2020, people looking for work are expected to:

  • Participate in at least one phone or online appointment with their job services provider
  • Agree to a job plan which lays out what a job hunter will do while on the payment to move back into employment
  • Undertake four job searches a month
  • Take part in training or other activities online or in-person if safe


Penalties

  • Payments will not be suspended and financial penalties won't apply if job hunters can't meet the above requirements
  • If a job seeker is offered a job and rejects it without a valid reason, payments might be cancelled and it would be a four-week wait before you're allowed to apply for welfare again
  • Job seekers who are struggling to meet mutual obligations are encouraged to speak with their job service providers.


Building a Stronger Australia

According to Prime Minister Morrison, the extension of the stimulus programs will help the country's bounce back strongly from the pandemic crisis.

“Australia is a country that just doesn’t look to survive these things. We don’t go through challenges with our heads looking down, overwhelmed by the circumstances. That is not who we are.

Who we are is innovative adaptive people, supporting each other, reaching out to each other, drawing us all through, not for survival, but to be on the other side in the position where we can emerge stronger.”

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