While salon owners have been dreading the end of the JobKeeper payments in September, they were thrown another lifeline this week, with the Federal Government’s announcement that the scheme would continue until March 2021.

While the news has been welcomes by salon owners across the country, it’s important to note that there will be significant changes to the payment, and that not every business will qualify.

In summary: 

  • A second phase of the JobKeeper program will run to March 28, 2021;
  • Two tiers of JobKeeper will be introduced, based on hours employees worked in February;
  • The higher tier pays $1,200 a fortnight until January 3, 2021, after which it will reduce to $1,000 a fortnight;
  • The lower tier pays $750 a fortnight until January 3, 2021, after which it will reduce to $650 a fortnight; and
  • JobKeeper eligibility will be re-tested in October and early January 2021, based on turnover decline.

The Prime Minister said a review found the JobKeeper programme has been effective in saving businesses from collapse and workers from unemployment.

“We don’t set and forget when it comes to these arrangements, we continue to look at them and we continue to calibrate them to ensure they are being effective,” Mr Morrison said.

“The report recommends that we should continue JobKeeper and we shall, but it needs to be done in a way that is responsive to the circumstances,” Morrison said.

The tiers
There will now be two tiers of JobKeeper payments, defined by how many hours eligible staff worked before the COVID-19 pandemic in February.

Eligible staff that worked 20 hours or more each week in February will be eligible for the higher tier, while those that worked less are eligible for the lower tier of payments.

The higher tier will pay $1,200 a fortnight until January 3, 2021. It will then reduce to $1,000 a fortnight until the program ends on March 28, 2021.

The lower tier will pay $750 a fortnight until January 3, 2021. It will then reduce to $650 a fortnight until the programme ends on March 28, 2021.

The minimum wage condition will still apply, meaning businesses still won’t be allowed to pay staff a lower hourly rate than they were previously entitled to.

In practice, this means employers will be required to pay a higher proportion of their wage bills under JobKeeper 2.0.

New eligibility tests
Salons’ eligibility will be tested at the end of September and again in early January.

These tests will run along the same turnover criteria, but will require businesses to demonstrate an actual decline in revenue against a comparable period rather than forecasts.

Employers will be required to demonstrate their turnover declined at least 30% for both the June and September quarters to be eligible for JobKeeper payments covering the December quarter.

Also, employers will need to demonstrate they also meet the turnover decline across the December quarter to remain eligible for JobKeeper payments through to March 28, 2021.

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