COVID-19

A review of JobKeeper by Deloitte

On 21 July 2020, the Government announced an extension of the JobKeeper scheme until March 2021. What are the differences with the ongoing JobKeeper?

On 21 July 2020, the Government announced an extension of the JobKeeper scheme until 28 March 2021. The JobKeeper arrangements for the initial period to 27 September 2020 remain unchanged.

The key changes in relation to the JobKeeper Extension period are:

  • A reduction in the payment amount per fortnight from $,1500 
  • The introduction of a two tier payment system depending on the hours worked in February 2020; and
  • A requirement to retest the decline in turnover. Further, it appears that the retesting is to be done on a quarterly basis (i.e., no option to apply the test on a monthly basis) and is to be based on actual 2020 GST turnover, and not projected 2020 GST turnover.

The forecast cost of the JobKeeper Extension is $16.6 billion over the 6 month period. This is considerably less than the cost of the current program which is approximately $12 billion per month. The Government’s forecasts assume a significant scaling back of eligible employees and business participants from approximately 3.5 million currently to between 1.1 - 1.4 million during the period from September 2020 to March 2021.

 

JobKeeper to 27 September 2020

The JobKeeper arrangements as previously announced by the government will remain unchanged through until the end of JobKeeper Fortnight 13, ending on 27 September 2020.

 

JobKeeper Extension

The extension of the JobKeeper scheme will be split into 2 phases as follows:

First phase: From 28 September to 3 January 2021 (JobKeeper Fortnights 14-20). The two tier payment framework for the first phase is as follows:

  • $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • Otherwise: $750 per fortnight.

 

Second phase: From 4 January to 28 March 2021 (JobKeeper Fortnights 21-26). The two tier payment framework for the second phase is as follows:

  • $1,000 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average and for business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • Otherwise: $650 per fortnight.

 


Source: Deloitte website

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