JobKeeper payments will be extended until the end of March next year.

Prime Minister Scott Morrison announced the changes to the wage subsidy programs this morning, which comes as Victoria experiences a second wave of COVID-19 and numbers continue to climb in New South Wales.

However, while the program will be extended beyond the initial September deadline, the eligibility criteria has been tightened and payments reduced.

Full time workers on JobKeeper will, from the end of September, have payments reduced from the current $1,500 per fortnight to $1,200. From January next year, this will again drop, to $1,000.

For part time employees working less than 20 hours prior to February, payments will be halved, to $750 per week from September 28 and reduced to $650 from next year.

Businesses and not-for-profits will also be required to reassesses their eligibility and prove they experienced significant declines in turnover throughout the June and September quarters to be eligible for payments through the December quarter. This will need to be repeated, demonstrating the December turnover, to be eligible for payments in the March quarter.

The National Retail Association (NRA) has welcomed the news, but said many businesses continued to struggle. NRA CEO Dominique Lamb said an extension on an industry basis would be more appropriate.

“By our calculations, $3.4 billion in retail sales were lost in the month of April during the height of the lockdown restrictions. If we see the same spike we’ve seen in Melbourne occur in other parts of the country, the economics ramifications would be dire.”

“Only 1 per cent of retailers are looking to employ more people at present. The extension of JobKeeper until March will hopefully result in a boost to business confidence, but many employers will continue to tread carefully.

“Ultimately we really need to see a pick up in discretionary spending to prevent many small businesses from hitting the wall. That is why careful consideration also needs to be given to programs such as JobSeeker so that we don’t see an overnight plunge in consumer spending.”

The extension is forecast to cost the government an additional $16.6 billion and Treasurer Josh Frydenberg said the extension aimed to help support businesses until the economy picked up.

“The Government’s focus remains on reopening the economy where it is safe to do so, but the extension of these measures recognises that some parts of the economy will continue to be affected and need continued support,” Mr Frydenberg said.

“Sadly, as a result of this global health pandemic, businesses will close and people will lose their jobs, but that is why we have extended the Coronavirus Supplement and announced a new skills package to help people transition from welfare to work.

“It is also why we are extending the JobKeeper Payment beyond September to help keep businesses in business and Australians in jobs as our economy reopens.”

JobSeeker recipients have also been granted an extension until at least December, albeit at a reduced rate. The current $550 a fortnight supplement will be reduced from the end of September to $250. However, recipients will be able to earn $300 a fortnight, up from the current $106, without having their payments affected.

Those on JobSeeker will also be required to begin actively applying for jobs from August 4 under the changes, including by engaging with employment services and completing four job searches per month. Anyone who refuses a job offered to them will also now be penalised.

The announcement follows another horror day in Victoria, where a further 374 cases were confirmed in the last 24 hours, while New South Wales recorded another 13 cases.

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