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Alerting Business Owners: The new JobKeeper might cause bankruptices

The JobKeeper program that provides a wage subsidy to workers of up to $1,500 per fortnight is due to end in September. If you would like to more information on JobKeeper click here

However, with the surge of cases in Victoria and lockdown in Melbourne city, the Morrison Government has decided to revamp and extend the program beyond September. Once legislated, these changes will take effect from 28th September 2020. Providing different rates, the first extension period will be from 28th September 2020 to 3 January 2021 and the second extension will be from 4 January 2021 to 28 March 2021.

Business owners are urged to think twice before signing up again as the incentive could send them broke.

Workers who are receiving $1,500 per fortnight payments will also accumulate annual leave and other entitlements. Should the business owner decide to let the worker go at some stage, these entitlements will have to be paid out from cash reserves or from non-existent profits. Business owners are cautioned to consider taking on the extended JobKeeper scheme only if they have enough cash reserves to pay workers and their business is not at risk by keeping workers on JobKeeper.

If your business is struggling financially or you’re considering reapplying for Jobkeeper and would like to learn more, please talk to Insolvency Services Australia for free and confidential advice on our 24/7 toll-free hotline on 1800 003 883.

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