On Tuesday the government announced the JobKeeper payment will be extended to March 2021 under new conditions ensuring payments go to people in genuine need.
The extension will ensure local businesses can continue to survive and employ locals throughout the COVID-19 pandemic, according to Aussie Hotel owner Paul Tsorbaris.
He said if it wasn't for JobKeeper, they would not have been able to keep any of their staff.
“Thank God for that,” he said.
“It's bloody terrific and it's going to help businesses a lot.”
For Shepparton's Fryers Street Food Store co-owner Ingrid Thomas, the extension of the program has helped lift some of the mental strain associated with running her business.
“It enables us to look at sustaining our business,” she said.
“Having that security of the JobKeeper support through that period makes it a bit more manageable from that mental side of things.”
Prime Minister Scott Morrison and Treasurer Josh Frydenberg said the JobKeeper wage subsidy — which had been a flat $1500 fortnightly payment, regardless of prior income — would change to a two-tiered system.
Full-time workers will receive $1200 a fortnight and part-time workers who work less than 20 hours a week will get $750 from September 28, 2020 to January 3, 2021.
Between January 4 and March 28, 2021, it will be further cut to $1000 for full-time workers and $650 for part-time workers.
The government will continue to pay the JobSeeker coronavirus supplement of $550 a fortnight until September 24, but from September 25 to December 31, the supplement will fall to $250 a fortnight.
However, the income-free area has been increased to $300 meaning people can earn up to $300 without it impacting their JobSeeker payments.
One of the consequences of the flat $1500 fortnightly payment equivalent to minimum wage, was that people received more under JobKeeper than they did pre-COVID-19, a Treasury review has found.
About a quarter of recipients saw their income increase by an average of about $550, the same amount as the additional coronavirus supplement paid to JobSeeker recipients.
The review found the "increase in income" could be fixed by introducing a two-tiered system where the lower rate was set by the number of hours the employee worked.
The review found a "strong" case to continue JobKeeper past its expiry in the last week of September, with employment levels to drop by five per cent between March and September quarters — a faster and higher rate than experienced in the recessions of the 1980s and 1990s.
The wage subsidy will continue flowing to 3.5 million workers under rules set in March where companies with up to $1 billion in turnover suffered a 30 per cent loss in revenue, and companies with over $1 billion suffered a 50 per cent hit.
In an opinion piece for the Australian Financial Review, Mr Frydenberg said only businesses whose turnover remained below the threshold would be eligible for continued support.
“While not all these businesses will necessarily make it to the other side, by tapering the payment and extending the JobKeeper program, we give them the best chance of remaining viable,” he said.
Business turnovers will be checked again in October, according to a Treasury recommendation.
10°C