Huge change coming to JobKeeper
The JobKeeper wage subsidy will be extended until Christmas at a reduced rate of over $1000-a-fortnight for companies that qualify under a new, tighter, eligibility test.
News.com.au has confirmed that the long-awaited JobKeeper 2.0, to be announced this week, will reduce the current wage subsidy from $1500 a fortnight, but extend the wage support to COVID-19 impacted businesses until the end of the year.
The current JobKeeper scheme was due to expire in late September, but Treasurer Josh Frydenberg will now outline the new measures on Thursday.
Casuals will also no longer secure a flat-rate payment regardless of whether they are full-time or part-time under JobKeeper's second phase.
Instead, casuals and part-time workers will secure a part-time rate of the JobKeeper subsidy, ending the practice of 'overpaying' casuals.
The decision to phase out the JobKeeper wage subsidy over months rather than have support "fall off a cliff'' in September follows the shock decision to subject Victoria to a second lockdown that requires restaurants to close their doors and millions of Melburnians to stay at home.
It's understood the Morrison Government also considered tightening eligibility for sole traders, a proposal that got abandoned after the second lockdown.
A new turnover test will also apply to JobKeeper when the current scheme ends on September 27, to ensure that companies that have bounced back from COVID-19 shutdowns are removed from the program and it is targeted at the companies that most need support.
Companies that qualify for JobKeeper now are guaranteed support until the current scheme ends in September and will not be kicked off income support early.
While not confirming the specific figure for JobKeeper 2.0, which is understood to be worth over $1000 a fortnight, Mr Frydenberg said it was now clear that ongoing support will be required, particularly in Victoria.
"As we have highlighted there will be another phase of income support. It will stick to the principles that have guided us well. It will be targeted, it will be proportionate, it will be scalable, and it will be using existing systems,'' he told news.com.au.
"The JobKeeper payment is an economic lifeline to millions of Australians and hundreds of thousands of businesses.
"Barring the spread of the virus in significant numbers beyond Victoria, we expect to see the other state and territory economies continue their recovery towards a COVIDSafe economy."
HOW JOBKEEPER 2.o COULD WORK
Companies that are currently securing JobKeeper will be guaranteed payments until the current scheme ends on September 27. After that date, companies will need to prove they are still being hit by the impact of COVID-19 shutdowns in the tourism industry, or in restaurants and cafes in Melbourne.
Companies currently need to prove turnover is down by 30 per cent but only need to prove it once to qualify for payments until September.
That means a company that was hit hard in April but bounced back to normal trading in June is still eligible for the $1500 a fortnight payment for each employee.
The new monthly testing options for JobKeeper under consideration could be applied to the current program to wean companies off the subsidy or used to tighten eligibility for the scheme going forward for a smaller number of companies after September, such as Qantas.
Companies may be required to submit monthly updates on turnover to the Australian Taxation Office to prove cashflow is down.
This would make it easy to "flick the switch" and scrap JobKeeper for companies that no longer needed it.
Finance Minister Mathias Cormann confirmed the shift to a new turnover test as sensible.
"When the JobKeeper program was first announced, and businesses had to demonstrate a drop in turnover of 30 per cent or 50 per cent depending on their level of turnover, once they were in they were in for the entire six month period," he told Sky News on Sunday morning.
"As we get to the end of that six months, towards the end of September, it is going to be important to reassess which businesses still should be receiving this support.
"In the first six months, irrespective of what happened to your turnover after you initially qualified, you were in - but as we go into this next period, there is a need to reassess whether that support, you still need it for specific businesses.
CALL FOR JOBSEEKER EXTENSION
ACTU President Michele O'Neil called for JobKeeper to be extended for at least six months on Sunday.
There are also calls to extend the coronavirus supplement that has doubled the 'dole' now known as Jobseeker.
Economic modelling from The Australia Institute to be released on Monday finds that scrapping Jobseeker in September would force 120,000 children to live in poverty. Hundreds of thousands of Australians would also struggle to pay rent or service their mortgages, putting acute pressure on the housing market.
"The coronavirus supplement has been an essential part of our nation's response to this recession and has improved the lives of nearly half a million Australians. In fact, no other government has ever lifted so many people out of poverty so quickly," said Ben Oquist, executive director of The Australia Institute.
"Removing the supplement would put more than 600,000 Australians, including more than 100,000 children, into poverty. This will not only have serious negative social effects for decades to come but makes terrible economic policy by effectively withdrawing much needed stimulus.
"Our research shows that even if the government removes the supplement but increases the old rate of Jobseeker by $75 per week there will be a half a million person increase in poverty."
The Morrison Government is also expected to announce more generous Jobseeker payments will also be extended until the end of the year, but also at a lower rate than the current $550-a-week payment.
Originally published as Huge change coming to JobKeeper