JobKeeper Eligibility Criteria Eased by Federal Government

The Federal Government has today announced that it will ease the JobKeeper eligibility criteria for both businesses and employees as a direct response to the state of disaster declared in Victoria.  Importantly however, the proposed changes are not specific to Victoria and extend to all eligible businesses and employees. 

Victoria is Australia’s second-biggest state by economic output, with the Stage 4 lockdown expected to cause widespread economic pain and job losses without further Federal Government intervention.  Further, the emergency in Victoria has effectively invalidated Federal Treasury forecasts released a fortnight ago.  You can click here to read the official media release from the Prime Minister, Treasurer and Minister for Families and Social Services. 

Key takeaways: 

  • The decline in turnover test will only need to be satisfied for one quarter instead of multiple quarters.  For the JobKeeper period 28 September to 3 January, this will be the September 2020 quarter.  For the JobKeeper period 4 January to 28 March, this will be the December 2020 quarter.
  • Employees will be eligible if they were employed as a full-time, part-time, fixed-term or long-term casual employee on 1 July 2020.  This means that more casual workers will meet the 12-month test to be a long-term casual, and new employees who commenced after 1 March 2020 will now qualify.
  • The ‘work hours’ test to determine the payment rate will apply for the four weeks of pay periods before either 1 March 2020 or 1 July 2020.  The period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility.
  • Employees will now be eligible for the wage subsidies extension if they have been working for their employer since at least July 1, 2020, instead of the original deadline of March 1, 2020.
  • The planned reductions in the JobKeeper payments will still go ahead.  This means the JobKeeper rate will still drop from $1,500 to $1,200 for full-time workers, and to $750 for part-time workers, from October.
  • The changes to the program will see the cost of JobKeeper increase by around $15.6 billion.  

The Hamilton Locke Finance, Restructuring and Insolvency team have a broad range of top-tier experience acting for a variety of stakeholders in distressed scenarios.  For more information or advice on how these changes may impact your business or insolvency and restructuring advice generally please contact Nick Edwards, Brit Ibanez and Zina Edwards.

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