JobKeeper 2.0 announced: Two-tiered scheme to help businesses into 2021

With the current JobKeeper scheme due to end on 27 September, the government has introduced a two-tiered, scaled-down successor for employers that remain eligible, removing the adverse incentives created by the original scheme.

While the JobKeeper review did find that the scheme was pretty well targeted, going mostly to businesses that experienced an average decline in turnover in April of 37 per cent against the same month a year previous, there was also evidence of it stunting labour mobility and keeping non-viable businesses alive.

As such, under JobKeeper 2.0 the eligibility criteria has been significantly tweaked, with businesses required to prove they suffered an actual decline in turnover in previous quarters – June and September – before qualifying. 

Subsequently, to keep receiving JobKeeper into 2021, on 4 January businesses will need to reconfirm their turnover shortfall for each of the June, September and December 2020 quarters.

Speaking on Tuesday, the Prime Minister explained these changes in detail.

“The changes that we’re making, the first of those is to apply the JobKeeper test for the 30 per cent turnover reduction across the past two quarters and into the next quarter for the continuing eligibility out to the end of March of next year,” Scott Morrison said.

“There’ll be the next quarter after September, and then there’ll be the March quarter. In both cases, businesses will have the test re-applied in relation to their turnover and will be looking at their performance over the first six-month period of the program, and that will provide, where it’s needed, the gateway into the next phase of the program.”

The government has also made notable changes to the JobKeeper payment rate, scrapping its previous flat-rate approach.

“We made the conscious decision to have a flat-rate payment because we understood at that time that people were losing second and third jobs,” Mr Morrison said of the original JobKeeper amount.

The PM elaborated that given the changed situation, a two-tiered system is now possible.

From 28 September 2020 to 3 January 2021, the payment rate will be $1,200 per fortnight for those who were employed full-time in the four weeks before 1 March 2020.

Employees working in the business for less than 20 hours a week on average will receive $750 per fortnight instead of the current single rate of $1,500.

However, this will change further.

In fact, from 4 January 2021 to 28 March 2021, the payment rate will be reduced to $1,000 per fortnight for full-time workers, and $650 for part-time employees working 20 hours a week or less.

According to Treasurer Josh Frydenberg, the new arrangements for the JobKeeper payment are expected to cost an additional $16.6 billion.