The JobKeeper wage subsidy has been extended until March next year, a six-month extension, but the payments will be reduced. JobSeeker will continue until the end of the year. JobKeeper has been adjusted to deal with what were seen as flaws in its original design.
Both programs will continue as they are until the end of September. After September, JobKeeper payments will fall from $1500 a fortnight to $1200. People working fewer than 20 hours a week will receive $750 a fortnight.
From the start of 2021 the payments will fall again, to $1000 a fortnight and $650 for people working fewer than 20 hours a week.
Businesses will have to reassess their eligibility for JobKeeper each quarter and must show that their business is down at least 30 per cent from pre-COVID levels, with reference to their actual turnover in the June and September quarters.
Under the original scheme businesses applied once and were only required to give an estimate of revenue change.
Steven Hamilton, a visiting fellow in the Tax and Transfer Policy Institute at the Crawford School of Public Policy, wrote in The Conversation that this change would prevent the profiteering that occurred, “given many of the businesses that qualified will have been impacted only mildly or for only a short time.”
Hamilton said: “The original payment structure – paying eligible businesses $1500 per fortnight for every worker, regardless of each worker’s earnings or work hours – was always a baffling design choice. It means that a quarter of the workers covered got more money than they had been earning before.”
More than five million people receive payments from the two programs. JobKeeper is paid to 960,000 employers who pass it on to 3.5 million employees.
The government expects fewer people to be on JobKeeper – 1.1 million after September and one million during the March quarter next year.
Hamilton said: “Extending JobKeeper by another six months but at a more modest level and with tighter targeting is prudent and pragmatic, and far better than driving off the fiscal cliff.
“But this still represents a large withdrawal of stimulus from the economy, reducing the incomes of many workers at a time of great fragility.”
The JobSeeker supplement will continue for another three months, until the end of the year, but will fall from $550 a fortnight to $250, which means that people on the program will receive $815 a fortnight after September.
The revised JobSeeker program will allow recipients to earn $300 a fortnight before having their government payment reduced.