Prime Minister Scott Morrison has confirmed JobKeeper will continue to 28 March 2021, calling it a “game-changer” for Australian businesses.
A two-tier payment will be introduced from 28 September, including a reduced rate for those working less than 20 hours a week after the Treasury review found a quarter of recipients received more than their pre-COVID wage under the current $1500 a fortnight payment.
Payments for employees working more than 20 hours a week will decrease to $1200 a fortnight from 28 September until 3 January 2021. The amount will drop to $1000 from 4 January until 28 March 2021.
From 28 September until 3 January 2021, employees working less than 20 hours will receive a lower rate of $750 a fortnight, with the amount dropping to $650 from 4 January until 28 March 2021.
The report found the JobKeeper subsidy “distorts wage relativities between lower- and higher-paid jobs, it dampens incentives to work, it hampers labour mobility and the reallocation of workers to more productive roles, and it keeps businesses afloat that would not be viable without ongoing support.
“There are two groups whose incentives to work or to take on additional hours may have been blunted: part-timers and casuals who have received an increase in income due to the flat-rate payment, and employees who have been stood down.”
Businesses will also need to undergo more extensive turnover testing to qualify for continued JobKeeper payments.
“The turnover test would be reapplied on two occasions,” said Finance Minister Mathias Cormann. “Early October and early January to ensure that they still actually require this level of support from the taxpayer.”
JobSeeker will also continue until December, with the $550 fortnightly supplement amount decreased to $250 from 28 September until the end of the year.
From August, those on JobSeeker will have to apply to employment services and undertake a set number of job searches a month.
Mr Morrison said there will also be penalties for people who reject jobs that are offered to them.
“At the end of September, we will moving to a higher rate of job searches [and] reintroducing the assets test for eligibility,” said the Prime Minister.
Those on JobSeeker will be able to earn up to $300 without it affecting payments.
Image credit: Seek Business