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The Coronavirus Economic Response Package (JobKeeper Payments) Amendment Act 2020 (Cth), received royal assent to extend the Coronavirus Economic Response Package (Payment and Benefits) Act 2020 (Cth), providing for the current JobKeeper entitlements for employers, to be extended.
The JobKeeper scheme (scheme) came into effect on 1 March 2020, during the insurgence of the Covid-19 pandemic, which albeit at varied levels of severity, took over the country earlier this year. The scheme provided some much needed relief to employers, and subsequently, employees, from the devastating impact the pandemic has had on Australia’s employment. Although the scheme has been extended, it has not come without its own set of changes and challenges which are forcing businesses to adjust to a “new normal” with respect to the scheme.
Previously, employers could qualify for the scheme provided they were a business or non-for-profit undertaking objectives predominantly within Australia, having shown that they employed at least one employee during 1 March 2020 to 1 July 2020 and that the business suffered a decline in turnover of 30% for businesses with an aggregate turnover of $1billion or less, or 15% for Australian charities and non-for-profits or other such commission-registered charities. The scheme was previously set at $1,500 per fortnight at its introduction to our job market. The Fair Work Commission’s JobKeeper enabling directions further allowed employers to direct their employees to adapt to varied arrangements such as directing employees to work less or no hours for the $1,500 per fortnight, directing them to undertake varied duties or job locations or making agreements with their employees to change their days or times of work. Employers could also ask their employees to use the scheme to take annual leave at half pay.
The extended JobKeeper scheme comes into effect on 28 September 2020 however the extension will see payments reducing in value and the criteria for qualifying for such payments become more stringent.
The payments will be reduced from $1,500 per fortnight per qualifying employee to $1,200 per fortnight from 28 September 2020 to 3 January 2020. The payment amount is further set to reduce for qualifying employers from 4 January 2021 to 28 March 2021.
Employers will now be required to requalify for the scheme, regardless of whether they had qualified for the JobKeeper in March 2020, involving demonstrating a decline in turnover using actual GST turnover in the September 2020 quarter in order to be eligible for the extension between 28 September 2020 to 3 January 2021. Similarly, the need to requalify will arise again to qualify for payments between 4 January 2021 to 28 March 2021 and the qualification period for those payments will be for the December 2020 quarter. The decline that needs to be proven for each quarter shall remain to be of 30% for businesses making an aggregate of less than $1billion and 15% for non-for-profits however, this inevitably means that a business will need to prove a consistent decline in turnover to qualify for the payments in each extension period.
Additionally, although the JobKeeper enabling directions shall still continue to apply, an employer’s ability to justify the amount of JobKeeper payments by directing employees to take annual leave at half-pay will no longer be an option from 28 September 2020.
While the abovementioned changes signify tightening of the provisions, there is some reprieve for employers who previously qualified for the JobKeeper payments in the March 2020 to September 2020 period however are unlikely to qualify for the extended period commencing 28 September 2020. Such employers shall be known as legacy employers. An employer will be deemed a legacy employer if they were entitled to JobKeeper payments for an eligible employee before 28 September 2020 and is unlikely qualify for JobKeeper payments for the extended period. Provided such legacy employers can prove by way of a certificate that they have experienced a minimum of 10% decline in turnover, the extension will provide for such legacy employers to be granted modified JobKeeper enabling directions powers or permit them to make certain customised agreements with their employees such as:
Although we may see an attempt to maintain a balance with respect to the extended JobKeeper provisions, as with any change, the ripple effect of these changes will be something to look out for.
If you have any questions on how this may apply to you, feel free to contact us on (07) 3009 9300 or send us an email at admin@rbglawyers.com.au.