JobKeeper payments for thousands of workers have been reduced from today, as the Federal Government looks to slowly phase out the economic lifeline.
Dubbed Jobkeeper 2.0, the second phase of the payments will see payments reduced from $1200 a fortnight to $1000 per fortnight.
But that's not all – businesses and not-for-profits are also required to reassess their eligibility for the scheme, as some may have recovered to an extent where it is no longer needed.
Confused? Here's a simple breakdown of the changes from today, January 4.
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What is happening with the JobKeeper payment?
The full JobKeeper payment for those who are still eligible is reduced by $100 a week.
Previously, between September and January 3, the full payment was $1200 a fortnight.
From today, January 4, that will scale down to $1000 a fortnight.
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Is that for every employee who receives the JobKeeper payment?
No.
Like previous versions of the scheme, it depends on how many hours you used to work at a business.
Here's how it works: if you used to work 20 hours or more a week (approximately 2.5 days) between March and July 2020, you are eligible for the full $1000 a fortnight.
If you used to work less than 20 hours – and now can't because of COVID-19 – you will receive the second tier of payments, which is $650 a fortnight, or $325 a week.
I see. And how long will I continue to be paid JobKeeper?
Don't pin your hopes on these payments running forever.
Currently, JobKeeper (even in this 2.0 guise) is slated to run until March 28, 2021.
After that it is presumed things will revert back to normal.
However, much like guessing when COVID-19 outbreaks will occur, it's impossible to say whether JobKeeper will be needed again.
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Why is the government doing this? Aren't some people still hurting?
The economic reason behind the slow reduction of JobKeeper is simple: it's an extremely expensive scheme, and there's a number of drawbacks to suddenly scrapping it all together.
If payments were scrapped instantly, they could conceivably create a "cliff" whereby people could no longer afford their mortgages, childcare, car repayments and more.
By slowly phasing out the payments, the government is reducing the severity of the economic shock of removing hundreds of thousands of people off welfare.
Yes, some people are still hurting, and there are economic supports available separate to JobKeeper as well.
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I'm a business owner, is there anything I need to do?
Yes.
To be eligible to have JobKeeper paid to your employees between January 4 and March 28 this year, you will need to be able to show that your GST turnover fell in the December quarter (October, November and December in 2020).
You can find the full details of the eligibility tests on the Tax Office's website. It's best to speak to your accountant or tax professional.
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I'm an employee, is there anything I need to do?
No.
JobKeeper payments are handled by the Tax Office, which is then applied for by your employer.
If you are eligible, your employer will pay you JobKeeper as part of your regular wage.
If you think you are eligible but you are not being paid JobKeeper, it's best to raise the issue with your employer first.
It's the polite and professional way to do it. They may have turnover changes that no longer makes their employees eligible.
If you still have disputes over the payment, it's best to speak to the Fair Work Commission.
You can get up-to-date information from the Federal Government's Coronavirus Australia app, available on the App Store, Google Play and the Government's WhatsApp channel.
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The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
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