As part of their response to the COVID-19 pandemic, the Australian Government released three separate financial aid programs to help Australians keep afloat:
- JobKeeper (and JobKeeper 2.0)
- JobSeeker
- JobTrainer
Each one targets different groups within the Australian economy, as a way to help provide support to those in need.
These announcements have been met with some confusion, particularly as the economic impacts of COVID-19 evolve.
In this article, we discuss what each of these programs entails, who is eligible to apply for them, and what this means for your business.
Through the uncertainty of COVID-19 and beyond, our team at Liston Newton Advisory is ready to provide expert tax and accounting advice for all your business accounting needs.
JobKeeper
JobKeeper was originally announced in March 2020 as part of the Government’s response to help businesses impacted by COVID-19.
This program was designed as a way to reimburse employers for wages they would normally be paying to their staff, but were unable to due to COVID-19 restrictions. By paying a supplement to all eligible businesses and their staff, the aim of the program was to:
- Improve the cashflow of Australian businesses affected by COVID-19
- Maintain the connection between Australian businesses and their staff
- Enable a quicker rebound when the crisis subsided
JobKeeper was initially slated to run from 30 March through to 27 September 2020. However, the situation that businesses are facing has evolved since the program’s inception, so changes have recently been made to accommodate these new developments.
New arrangements, known as JobKeeper 2.0, will now see the scheme extended until the end of March 2021, with reductions to the amount available to businesses.
The reimbursement amounts will also be divided into two different employment categories, Tier 1 and Tier 2.
Tier 1
This rate applies to eligible employees and business participants who were actively working for 20+ hours on average in a four-week period between 1 March and 1 July 2020.
Tier 2
This rate applies to all other eligible employees and business participants working 20 hours or less per week, on average, during this time. Those under Tier 2 will need to nominate the rate for which they’re claiming.
Time period
JobKeeper subsidy per employee
30 March - 27 September 2020
$1,500 a fortnight
28 September 2020 - 3 January 2021
- Tier 1: $1,200 a fortnight
- Tier 2: $750 a fortnight
4 January 2021 - 28 March 2021
- Tier 1: $1,000 a fortnight
- Tier 2: $650 a fortnight
Eligibility for JobKeeper
Small businesses need to demonstrate a 30% reduction in GST turnover during the eligible March-September period when compared to the same time the previous year. Larger businesses must be able to demonstrate a 50% reduction.
Alternatively, there are a number of tests that businesses can undertake that may allow for unique situations where comparing revenue to the previous year isn’t possible. However these tests can be quite complex, so it’s best to seek advice from your tax agent to discuss whether these are necessary for your business.
It’s important to note too that only particular employees are eligible for the program, so you must review the criteria carefully before applying for any reimbursements.
Updates to JobKeeper eligibility
As the program has been extended until 2021, the eligibility periods are also changing.
To be eligible for the October-December payments, you must be able to meet the revenue reduction tests for the September quarter. To be eligible for the January-March payments, you must be able to meet the revenue reduction tests for the December quarter, in addition to the September quarter.
The Government is yet to announce how the alternative tests will work for the extension of this program.
There has been an adjustment to your employees’ eligibility criteria too, which is applicable from 3 August onwards. Employees that were employed on a full- or part-time basis on or before 1 July 2020 may now be eligible for this program. Long-term casuals who started with you on or before 1 July 2019 will also be eligible.
JobSeeker
It’s a sad fact that not all businesses will be able to maintain all of their employees, even with the support of JobKeeper. To combat this, the Government has boosted its unemployment welfare payments during the COVID-19 crisis period. This takes the form of a special supplement to increase the benefits available to JobSeeker participants, which is paid in addition to the regular JobSeeker payment.
Eligibility for JobSeeker supplement
To be eligible for the JobSeeker supplement payment, you must be between 22 years old and the pension age, meet the Australian residency rules, and be actively looking for employment.
Those who are actively working on a part-time or casual basis can still receive this payment. This is designed to encourage unemployed people actively looking for work to take any employment opportunities available to them, knowing they’ll still receive the JobSeeker supplement. However, the amount they receive will vary depending on how much they’re earning.
It’s important to note that there are income and asset tests that are applied before you can receive this payment.
For your income, if you earn $106 per fortnight from other sources, your JobSeeker supplement will decrease as your income increases.
The current asset test has closed temporarily until 25 September to allow for more participants to enter the program. After this period, participants will be required to report their total net assets before they can receive a payment. JobSeeker payments will be cancelled if the participant's assets exceed a threshold of between $268,000 - $616,000, depending on their situation.
How JobSeeker payments work
The JobSeeker payment will vary depending on the individual’s personal situation. This includes whether they have a partner or children, are considered the principal carer, and the income they’ve earned within the last 14 days.
The current JobSeeker supplement is $550 a fortnight on top of the regular JobSeeker payment. From 25 September 2020 the supplement will reduce to $250 a fortnight.
Quick Q&A
What is the difference between JobSeeker and JobKeeper?
JobKeeper is a payment designed to help businesses retain their employees during the COVID-19 crisis. JobSeeker is a scheme that provides financial aid to unemployed people looking for work. The JobSeeker supplement provides an extra financial boost to those facing unemployment.
Can you be on JobSeeker and JobKeeper?
No, you’re not able to receive JobKeeper and JobSeeker payments at the same time. Each scheme is for a different purpose. If you do find yourself receiving both payments, notify Centrelink and your employer immediately. You will be required to repay the overpaid amount in full.
How do I switch from JobSeeker to JobKeeper?
You can’t actually switch from JobSeeker to JobKeeper, as they’re run by different entities. What you can do, though, is cancel your JobSeeker payments via Centrelink as soon as you find out you’re receiving JobKeeper.
JobTrainer
JobTrainer is a third government incentive aimed at reskilling our workforce to equip them for in-demand positions.
This was announced as a $2 billion dollar program to provide free or low-cost training for those looking to up-skill in particular sectors. A large portion of these funds have been allocated to subsidise the wages of apprentices and trainees.
Apprentice subsidy
This program began on 1 January 2020, and will run through until the end of March 2021. It has been designed to reimburse employers who take on apprentices and trainees. Under this program, employers will be reimbursed 50% of their eligible employees wages, up to a maximum of $7,000 per quarter.
Eligibility for JobTrainer
The program started out restricted to businesses with 20 or fewer staff, however it’s since been extended to include businesses with 200 or fewer staff.
While JobTrainer doesn’t require any revenue reduction tests in order for the businesses to qualify, your apprentices must be registered with an eligible group training organisation. They must have also been on your books from 1 July 2020 to be considered eligible. This program is considered an alternative to JobKeeper, so you’re only eligible to receive one at a time.
While you can’t claim both at the same time, JobTrainer is an attractive alternative for employers who didn’t quite meet the criteria for JobKeeper payments.
The final word
COVID-19 has cast a feeling of uncertainty across every business in Australia.
But, you can take comfort knowing that these subsidies exist for when you start to feel the financial effects of the pandemic.
The important thing to remember is that you must confirm whether or not you’re eligible before applying for any of these schemes. Otherwise, as well as wasting your time, you might face the sting of mandatory Government repayments.
