The Government has released some further detail on what the future of stimulus will look like in Australia.
JobKeeper 2.0
The JobKeeper program has been extended until March 2021 and a two-tiered payment is being introduced as part of JobKeeper 2.0. Crucially, only businesses who continue to meet the turnover reduction requirement will be eligible for continued support until March 2021.
These changes will affect a business’ eligibility from October 2020 onwards and, thankfully, those who are currently receiving JobKeeper payments will continue to receive them until 27 September 2020 without having to ‘retest’ their decline in turnover in case business operations have improved.
Eligibility
In order to be eligible for JobKeeper 2.0, businesses will need to demonstrate that they continue to meet the decline in turnover test which requires a reduction of business turnover due to COVID-19 (generally, a 30% decline for businesses with an aggregated turnover of less than $1 billion). In order:
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to receive payments between 28 September 2020 – 3 January 2021, businesses will be required to show that they met the decline in turnover test during both the June 2020 and September 2020 quarters with reference to their actual turnover.
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to receive payments between 4 January 2021 – 28 March 2021, businesses will be required to show that they met the decline in turnover test during each of the June 2020, September 2020 and December 2020 quarters with reference to their actual turnover.
When testing the decline in turnover, you are required to choose comparable periods in the prior year. For example, if you are testing the turnover reduction for the June 2020 quarter, you will need to compare the turnover to that of the June 2019 quarter.
Payment amounts
The flat $1,500 fortnightly payment is being reduced and will now depend on the number of hours an employee worked within the business during the month of February 2020. The following are the payment rates:
The definition of ‘eligible employees’ remains the same and the Commissioner has discretion to set out alternate tests if the employee’s hours were unusual in February 2020 (e.g. in cases of employees being on leave or volunteering for bushfire assistance).
SME Guarantee Scheme
The Government has announced that it will extend the Coronavirus SME Guarantee Scheme beyond 30 September 2020. The Government are currently supporting SME businesses (those with turnover below $50 million) by guaranteeing 50% of new loans for working capital until 30 September 2020.
The next phase will commence from 1 October 2020 and will be available until 30 June 2021. Some key changes will include:
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Expanding the purpose of loans beyond working capital to ensure a wider range of investment can be funded;
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Permitting secured lending (excluding commercial or residential property);
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Increasing the maximum loan size to $1 million (from $250,000) per borrower;
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Increasing the maximum loan term to five years (from three years); and
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Allowing discretion for lenders to offer a repayment holiday period.
The expanded Scheme will shift from providing access to working capital to enabling SMEs in accessing more affordable and longer credit so that they can invest for their future.
Job Trainer
The Government also announced the JobTrainer package which will expand the wage incentive to keep apprentices employed. The wage subsidy will be made available to medium businesses with less than 200 employees for apprentices employed as at 1 July 2020. The subsidy will cover 50% of the wages paid to apprentices and trainees, up to $7,000 per quarter.
For more information, contact your Moore Australia specialist.