With the scheme entering its final few weeks, the safety net of the Australian Government’s JobKeeper Payment enters a new phase. For some Australian businesses, the payment was a lifeline that kept them afloat during the storm, and for some individuals, it meant the difference between employment and losing their job.
As most are aware, the JobKeeper scheme is coming to an end on 28 March 2021. The scheme is transitioning into a new stage of support. As many economists are forecasting instability over the next few months it means businesses must ensure that they are receiving as much support as possible to get back on their feet. It’s therefore important for businesses to understand the next steps available and what the next stage of support looks like.
Amidst job insecurity and an unstable economy, how can your business and staff best prepare for life after JobKeeper? Find out below what our experts have to say.
It’s important to be aware that it is not only JobKeeper we shall farewell but will also see several important legislations draw to a close. Each legislation offered significant relief and support for various industries and businesses.
The following pieces of legislation will end before 30 June 2021:
- JobKeeper Scheme – 28 March 2021
- Coronavirus Supplement – 31 March 2021
- Backing Business Investment (fast-tracked depreciation) – 30 June 2021
- Apprentice/Trainee Wage Subsidy – 31 March 2021
- Homebuilder – 31 March 2021
Getting across the new legislation and support channels
As JobKeeper ends, new legislation has already come into effect as government support transitions into the next phase. This phase of government support is focused on creating jobs, providing temporary cashflow support, and returning businesses to pre-COVID positions.
The introduced legislation are as follows:
- Full Expensing of Depreciation Assets (FEDA) – until 30 June 2022
- Loss Carry Back Tax Offset (only for Corporate taxpayers 2020-2021 and 2021-2022 income years) – until 30 June 2022
- JobMaker Hiring Credits – until 6 October 2021
- Travel Agents – until funds depleted
JobMaker – what is it and are you eligible?
As the name suggests, JobMaker provides relief to businesses to create new jobs. Specifically, the Jobmaker Hiring Credit scheme is available to eligible businesses and non-profit entities that create new jobs. This excludes businesses looking to fill the role of an employee who left the business.
All jobs created from 7 October 2020 until 6 October 2021 are eligible for JobMaker. The relief scheme provides the employer with credit to support wage costs. The amounts are as follows:
- $200 per week for new employees between the ages of 16 to 29
- $100 per week for new employees between the ages of 30 to 39
The ATO administers JobMaker and is paid quarterly from the start date of the employee for 12 months. Want to find out if you’re eligible for JobMaker? Click here to confirm the eligibility of your business and employee.
JobMaker does not require a ‘decline in turnover test’ to receive payments and applies to new businesses.
Managing your future (and cash flow)
As we enter this unprecedented time of change, business owners must implement effective cash flow management tactics. Effectively managing your cash flow and utilising government support where applicable will help build a stronger financial position for your business.
Here are a few questions you should ask:
- What is our cash flow position?
- How do our product mix and sales strategy need to change to reduce the impact of the current climate?
- How can we take advantage of the current climate?
- What’s our marketing plan and strategy? How can we best promote our business cost-effectively?
- Can we reduce our running costs of the business by modifying our operating hours?
- Can we convert our debt to interest-only?
- Can we reduce or defer rent?
- What non-essential or discretionary expenditure can we eliminate?
- Can we reduce stock levels and sell surplus assets that have no debt attached to them?
- Can we develop a payment plan or deferrals for personal expenses?
By revisiting and analysing your growth plans, forecasts, and support channels, businesses will be able to prepare for life without JobSeeker and optimise their ability to return to pre-COVID market position.
If you have any questions concerning the end of JobKeeker or the benefits of JobMaker and what you need to consider to be eligible, contact your Morrows advisor today.