The Commonwealth Government’s JobKeeper scheme is set to end on 28 March, a looming deadline that is a source of uncertainty for the Queensland legal profession.
The JobKeeper payment scheme is a subsidy for businesses significantly affected by COVID-19. The wage subsidy program is designed to help businesses affected by COVID-19 to cover the costs of their employees’ wages, so that more employees can retain their job and continue to earn an income.
The JobKeeper scheme was originally to expire in September 2020 and was then extended to 28 March 2021 due to the continuing nature of the pandemic. Treasury data reveals that, at its peak, 176,711 Queensland businesses applied for JobKeeper in the month of July 2020.1 Despite the strengthening of the economy, latest figures indicated there were still 77,654 Queensland businesses applying for JobKeeper in December 2020.
While general economic conditions have improved over the past months there is still a lingering uncertainty about how deep and widespread the impact of the JobKeeper cliff on 28 March will be. A quick poll of some QLS members conducted through QLS Update and social media channels revealed that 42% of respondents said their firm still had employees relying on JobKeeper payments and were concerned about how their firms would be impacted by the end of the wage subsidy. In addition to the direct impact on supported law firms, the withdrawal of JobKeeper is likely to have broader economic impacts on businesses and some employees.
The concern for law firms appears to be coming in a few ways:
- Law firms may be applicants for JobKeeper themselves and will lose the benefit of that support from 28 March 20201, or
- Law firm business clients supported by JobKeeper may find themselves in financial difficulty and find it difficult to afford legal assistance, or
- Law firm individuals clients may find themselves laid off or lose their employment if their employer is no longer viable without wage subsidy support.
The QLS poll suggests that, for some law firms and their clients, the remainder of the financial year may be challenging. While it will remain to be seen what the full impact on the legal profession will be of the JobKeeper cliff on 28 March 2021, firms should now be planning for that potential impact.