JobKeeper eligibility expanded with $15.6 billion added to the pool
7 August 2020, Written by David Simmons
Federal Treasurer Josh Frydenberg (pictured) has announced changes to the JobKeeper program in response to Stage 4 lockdowns in Victoria, making it easier for companies to access the stimulus.
The changes will see an extra $15.6 billion added to the pool of funds available to struggling Australian businesses, bringing the total cost of the program to $101 billion.
Of the extra $15.6 billion Frydenberg says around $13 billion will go toward businesses in Victoria, with an estimated 500,000 employees in the state to go onto JobKeeper in the September quarter.
Two important changes have also been made to eligibility requirements, namely the business turnover test and the employee eligibility test.
Previously, business turnover needed to be down in both the June and September quarters to be eligible for JobKeeper in the December quarter.
Now, businesses only need to be down by the requisite amount in the September quarter to be eligible for payments in the December quarter.
"This takes into account that some businesses through May, through June, through April, did OK," Frydenberg said.
"But obviously with the Stage 4 restrictions particularly in Victoria through the months of July and August and September it's going to be very difficult. And these businesses will now be eligible for payment."
The other change means employees who were on the books as of 1 July are now eligible to receive the payment.
Previously employees had to have been on the books from 1 March to receive JobKeeper.
"Some businesses, as they were opening up and progress was made on the health front, they took on new employees," Frydenberg said.
"Those employees will now be eligible for JobKeeper, which will again provide additional relief to businesses."
The amounts available to employees under the program have not changed.
From October, businesses that continue to meet the revenue reduction requirements will be entitled to $1,200, followed by a reduction to $1,000 starting in 2021.
For employees who worked less than 20 hours per week, their supports will drop to $750 per fortnight as of October and $650 from the start of next year.
Just yesterday the Prime Minister revealed the cost of Victorian lockdowns could shrink real GDP in Australia by up to $12 billion.
Approximately 80 per cent of the economic cost is expected to be in the affected areas of Victoria, representing an approximately $6-7 billion hit.
The national unemployment rate is now expected to peak at 10 per cent, up from a previously forecast high of 9.25 per cent.
However, when looking at the effective unemployment rate, which includes those who are employed but not working any hours, Morrison says that could now reach 13 per cent.
Business Council chief executive Jennifer Westacott has today welcomed Frydenberg's announcement, saying it will boost confidence in Australia.
"These sensible changes to JobKeeper will make it easier for businesses to retain workers and will boost much needed confidence in the community," says Westacott.
"The changes to the eligibility test reflect the upheaval and uncertainty in the jobs market, and the changes to the turnover test reflect that businesses are struggling.
"People are worried about the future and we endorse the government's actions in targeting taxpayers' money to saving jobs and creating new ones. Crucially these changes target money to the jobs and people most at risk."
Updated at 10:13am AEST on 7 August 2020.
Author: David Simmons