Tax & AccountingJuly 23, 2020

COVID-19: JobKeeper Payment and income support extended

The federal government has announced extensions of the JobKeeper Payment to 28 March 2021 and temporary Coronavirus Supplement to 31 December 2020. 

JobKeeper Payment

The JobKeeper Payment will continue to be available to eligible businesses (including the self-employed) and not-for-profits until 28 March 2021. From 28 September 2020, eligible employees and business participants working less than 20 hours per week on average will receive the payment at a lower rate. Average hours per week will be based on the four weekly pay periods ending before 1 March 2020.

The following payment rates per fortnight (currently $1,500) will apply for eligible employees and business participants.

Date Full rate Lower rate
28 September 2020 to 3 January 2021 $1,200 $750
4 January 2021 to 28 March 2021 $1,000 $650

Employers will be required to nominate the payment rate claimed for each of their eligible employees or business participants. The ATO will provide guidance on circumstances that are not addressed under the general rules for determining average hours per week.

From 28 September 2020, employers will also be required to reassess their eligibility by reference to their actual June and September quarter turnovers. Employers will be required to reassess their eligibility again for the March 2021 quarter. An entity’s eligibility prior to 28 September 2020 will not be affected if the additional turnover tests for the extension period are not met.

The new arrangements for the JobKeeper Payment are expected to cost an additional $16.6b. An independent evaluation will be conducted at the conclusion of the program, as recommended under the Treasury’s JobKeeper Payment review.

Coronavirus Supplement

The payment period of the temporary Coronavirus Supplement has been extended to 31 December 2020.

Eligible income support recipients will continue to receive the payment at a rate of $550 per fortnight up to and including the period ending 24 September 2020. The payment rate will be reduced to $250 per fortnight for the period from 25 September 2020 to 31 December 2020. The Coronavirus Supplement will continue to be paid to existing and new recipients of certain income support payments.

The Treasury fact sheet also outlines the following changes to apply from 25 September 2020:

  • Adjusted income taper test. The income free area for the JobSeeker Payment and Youth Allowance (other) will increase to $300 per fortnight for both. Recipients can earn up to $300 per fortnight and still receive the maximum payment rate of the JobSeeker Payment and Youth Allowance (other). The Coronavirus Supplement will remain outside the income testing, meaning anyone eligible will receive the full rate of the Supplement.
  • Means testing. Assets testing for all payments will be reinstated for existing and new recipients. The Liquid Assets Waiting Period for all payments will also be reinstated.
  • Partner income testing. The partner income test cut-out will increase to $3,086.11 per fortnight, or $80,238.89 per annum, for individuals with no personal income. The taper rate will increase from 25 cents to 27 cents on 25 September 2020 and apply until 31 December 2020. The partner income test taper rate was reduced on 26 April 2020 and was previously 60 cents to the dollar.
  • Expanded eligibility criteria. JobSeeker Payment and Youth Allowance (other) criteria will continue to include permanent employees who are stood down or lose their employment and sole traders, the self-employed, casual workers and contract workers who meet the income and assets tests until 31 December 2020.
  • Reduced waiting times. The Ordinary Waiting Period, Newly Arrived Resident’s Waiting Period and Seasonal Work Preclusion Period will continue to be waived until 31 December 2020.

The new arrangements for the Coronavirus Supplement are expected to cost an additional $3.8b.

Source: Prime Minister, Treasurer and Minister for Families and Social Services joint media release, Treasury fact sheet, 21 July 2020.

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