How JobKeeper 2.0 Will Affect Your Cash Flow
The Australian government recently announced plans to extend the JobKeeper Payment scheme, a support scheme introduced at the start of the pandemic to help businesses retain staff.
The JobKeeper 2.0 program is set to take over from the existing wage subsidy scheme at the end of September, and while the extension of the scheme is welcome news, the amount of financial support on offer is due to be cut.
Let’s look at what the scheme is, how you can access the support, and how you can plan for the financial impact on your business.
The JobKeeper 2.0 scheme is set to run from 28 September to 3 January 2021, and replaces the first phase of the JobKeeper scheme which was introduced at the start of the coronavirus pandemic. Under the new version of the scheme, businesses will continue to receive fortnightly payments and still have to meet the minimum wage requirements to qualify.
Employee eligibility for JobKeeper 2.0
Eligibility for the second phase of support, JobKeeper 2.0, is similar to the first phase. According to official guidance from the Australian Taxation Office (ATO), businesses will not have to re-enroll employees for support or re-assess their employee’s eligibility, provided the employee is being claimed for prior to 28 September.
Key changes to under the Jobkeeper 2.0 payment scheme:
- Employers may now include employees with the company since 1 July, an extension on the previous eligibility period of 1 March
- There are now two tiers of payments, depending on how many hours per month your employee works – employees who worked more than 80 hours per month before 1 March or 1 July will receive tier 1 payments of $1,200 per fortnight before tax, whereas tier two payments for those that worked less than 80 hours will be $750 a fortnight
- Sole traders must provide declarations about their involvement in their business during February to remain eligible for support, under the second phase
- Businesses must be able to show a fall in GST turnover of at least 30% for the 2020 September quarter when compared to the 2019 September quarter and Business Activity Statements (BAS) could be required
JobKeeper 2.0 Extension 2
Under Jobkeeper 2.0 there will be a second extension that will come into effect from 4 January 2021. This extension of the scheme will feature a further decrease in payment amounts to $1,000 for tier 1 payments and $650 for tier two payments.
In order to be eligible for the Jobkeeper 2.0 Extension 2 businesses will be required to demonstrate a fall in turnover of at least 30% in the 2020 December quarter when compared to the 2019 December quarter.
Preparing your business for the changes
The key to adapting to the new decreased JobKeeper payments is in planning for the impact on your cash flow. Using Float’s scenario planning tool you can prepare your business for a number of different potential scenarios and see how the decisions you make now could impact your business’ cash further down the line.
Want to understand whether you can afford to keep that team member on your payroll with the reduction in Jobkeeper payments? Easily answer all of your ‘what-if’ questions with scenario planning in Float.
At the best of times, scenario planning is a good way to examine the finances of your business. However, right now it’s an invaluable insight to help you preempt any of the pitfalls JobKeeper 2.0 may bring.
The changes to the JobKeeper scheme may be daunting for businesses, but with careful cash flow forecasting, you can ensure your business makes the most of the help available.
Want to try out scenario planning? We’re offering an extended free trial of Float to businesses in areas under lockdown, find out more.