The JobKeeper program provides a wage subsidy to workers up to $1,500 per fortnight to the end of September. Due to the surge of cases in Victoria and Melbourne city lockdown, the program has been extended to the 28th March 2021 with new pay rates. Below explores some advantages and disadvantages of applying (or reapplying) for JobKeeper:
The JobKeeper program has been a lifesaver for many businesses as it offers both a financial and business boost. By avoiding redundancies you are able to keep people employed during harsh economic times which will reduce the cost of rehiring staff later down the track and allow you to retain talent. Furthermore, it offers a long term advantage by building employee loyalty and a stronger workplace culture where you have put their best interest at heart.
A key disadvantage from the program is the potential of making future redundancies more costly as the employees will continue to accrue entitlements and annual leave. Where they are let go, these entitlements will have to be paid out from cash reserves or from non-existent profits. Something else to consider is the potential cash flow issues that may also arise as you will need to pay staff first before receiving the JobKeeper subsidy in arrears.
Overall, you should be aware of the advantages and disadvantages of the program before making the decision. If your business is struggling financially or you’re considering reapplying for JobKeeper and would like to learn more, please talk to Debt Free Australia for free and confidential advice on our 24/7 toll-free hotline on 1800 676 598.