The JobKeeper payment scheme will end on 28 March 2021. What does this mean for individuals?
On my early morning walk today, I took this photo of the sunrise and a storm on the horizon. At that moment, I wondered whether the storm was heading towards us, and thought about a Sydney Morning Herald article I read this week, discussing the importance of The Australian Industry Group's report to the government about the potential risk of increased redundancies when JobKeeper ends late March 2021 (link here).
Is there a storm approaching?
For many reasons, this question is important because of the approaching timeframe, the potential impact on job security and Australian households' income. This article will look at how this could affect individuals and what help could be taken now.
“There is a significant risk of a marked increase in insolvencies when the JobKeeper scheme ends.” (1)
What Happened
The Government introduced the JobKeeper scheme in March 2020, to help subsidise eligible businesses affected financially by the COVID-19 pandemic. To many businesses, the JobKeeper payment has been a lifeline. It has helped keep more Australians in jobs and businesses' doors open.
“Many businesses linked to inbound tourism, international students, entertainment venues, and passenger transport among others continue to struggle and, in the absence of new measures will face a heightened risk of retrenchments, insolvency from late March when JobKeeper comes to an end,” it says." (2)
Come 28 March 2021, the JobKeeper payments will end. There have been no discussions about the government granting any further extensions.
As reported in the SMH article covering the report by AIG, the likely impact will see: -
- Many industries continue to struggle to keep staff, particularly in industries such as tourism or international trade.
- Many businesses are likely to become insolvent, which is likely to increase the unemployment rate and increase the likelihood of redundancies.
- Employees of failed businesses who cannot pay their staff entitlements may be supported by the government’s Fair Entitlement Guarantee safety net.
What This Could Mean
Exact figures are not yet known, but many full-time employees are on reduced hours or have been “stood down” temporarily by their employers who have been financially impacted by COVID-19.
After Jobkeeper stops, businesses may face some hard decisions. Without JobKeeper payments, are they able to keep their staff, do they offer redundancies, or if they have overwhelming debts do they place their businesses into liquidation? Employees may begin to feel uncertain about job security or future employment prospects.
What Could Be Done Now
Ironically, uncertainty has been the one certainty in recent times, though it doesn't make things easier.
Engaging in and seeking help and support can help prepare for the future.
Especially if financial hardship is happening now or likely to happen in the future, here are some actions which can help.
- Reach out to a qualified Financial Counsellor at the National Debt Helpline on 1800 007 007 to talk about budgeting.
- There are other 24/ 7 support agencies and organisations to help in other situations, here is a link to a list of who can help.
- Contact qualified insolvency professional to discuss options about personal or business finances.
- Talk to family and friends.
This time last year, we wondered what the future would hold, the information was wide-ranging, and no one had the answers. However, the unwavering message has been.
"If there is (or likely to be) financial difficulty; early action and advice mean more options will be available".
To learn more about the options, updates and information, or questions, contact us on 1300 631 710, or make an enquiry now.
(1) "Limit generous redundancy payouts or nation will face steep bill: employer group", Jennifer Duke, Sydney Morning Herald, 8 February 2021 (accessed 10 February 2021).
(2) Ibid.
