COVID 19: Government's Updated Economic Statement

Last week we heard from Treasurer Josh Frydenberg with his economic update and we were also introduced to JobKeeper 2.0. The scheme has been extended for six months longer than the forecast deadline.

In summary – JobKeeper 2.0

• The Government is scaling down how much it pays to employees currently on JobKeeper.

• There are now two tiers – a split between workers of 20+ hours per week, and those less than 20 hours per week, ie anew payment regime for full-time and for part-time workers.

20+ hours

• From the 28th September, the fortnightly payment for full-time workers (that is 20+ hours per week ) is decreasing from $1,500 to $1,200.

• The above will last until the end of the year, then from 4 January that will drop again, from $1,200 to $1,000 a fortnight for full-time workers.

Less than 20 hours

• For those working less than 20 hours per week the current fortnightly payment will drop to $750 per fortnight in September and then to $650 per fortnight from January 2021.

The new end date for "JobKeeper 2.0" will be 28March 2021. The extension will cost the Government around $16 billion, taking the scheme's total cost to $86 billion.

Eligibility requirements

Whilst the decline percentages (of 30%, 50% and 15%) have not changed, the decline for JobKeeper 2.0 is to be measured for the September to January period: using actual GST turnover in the June and September 2020 quarters, and for the January to March the decline is measured using the actual GST turnover in each of the June, September and December quarters, relative to comparable 2019 periods.

Notably the following entities are ineligible for the JobKeeper Payment:  

• Entities subject to the major bank levy as at 1 March 2020  

• Commonwealth, State and Territory government agencies and local governing bodies  

• Entities wholly owned by Commonwealth, State and Territory government agencies and local governing bodies   

• sovereign entities and entities wholly owned by a sovereign entity.  

The eligibility rules for employees remain unchanged.

If you have any questions regarding JobKeeper 2.0 don’t hesitate to contact a member of our team.