The federal government will extend the JobKeeper program for another six months passed the September 27 deadline to support Australian households and businesses through the COVID-19 pandemic and the economic recovery.
JobKeeper will now run through to March 28, 2021.
Announcing the changes in a media release on July 21, Prime Minister Scott Morrison said: “There is no silver bullet and this is about delivering the support Australians need and the policies our economy requires to reopen, recover and create jobs.”
“These supports are a lifeline, but our JobMaker plan is also setting Australia up for our country’s recovery. We’re delivering the initiatives and reforms that will help grow our economy and create the jobs we need for the years ahead,” said Morrison.
The government estimates that the extension of JobKeeper will cost an additional $16.6 billion.
Fortnightly Rates Will Reduce to Adjust Workers to the Economy
The program will see a reduction in the fortnightly rate from December to March as the government attempts to adjust businesses to the new economic environment.
From September 28 a two-tiered payment will be introduced to more reliably represent the incomes of employees before the COVID-19 pandemic.
This means for those working full time from Sept. 28, 2020, to March 28, 2021, they will receive $1200 (USD$832) per fortnight, and from Jan. 4, 2021, to March 28, 2021, $1000 (USD $700) per fortnight.
Employees who were employed for less than 20 hours a week on average will receive $750 (USD$526) and $650 (USD$456) for the same periods.
From Sept. 28, 2020, businesses, and not-for-profit organisations will also need to demonstrate their eligibility for the scheme by showing in their actual June and September quarter turnovers that they have suffered a continuing ongoing decline in revenue.
To qualify for the payments after Dec. 31, 2020, employers will also need to demonstrate that they have had a decline in revenue in the previous three quarters ending on Dec. 31, 2020.
COVID-19 Income Support to Continue
The Morrison government will also extend the payment period for the temporary Coronavirus Supplement for those on income support to Dec. 31, 2020, and boost the fortnightly payment by $250 (USD $175).
The extension is estimated to cost the federal government $3.8 billion and will ensure there are appropriate incentives for those receiving the payment to seek out employment or study opportunities.
To encourage people back into the workforce, the government will increase the income free area for the JobSeeker Payment and Youth Allowance from $106 per fortnight to $300 per fortnight.
These changes will mean individuals will be able to earn up to $300 per fortnight without losing any JobSeeker payment or affecting their eligibility for the Coronavirus Supplement.
The Business Council of Australia chief executive Jennifer Westacott said in an interview with Sky News on July 21 that she believed the changes were very sensible.
She said the government was now making sure “that the incentives are right for people to get back up and running where they can, and for people to work when they can.”
However, Westacott said that the real challenge was now how the government could get the economy growing again so that the economy did not experience a second wave of unemployment.
“And make sure that we’re putting money in people’s pockets. Some of that JobKeeper extension is vital to that but maybe we should think about things like bringing forward those personal tax cuts so people have got money in their pockets, ” she said.