JobKeeper: ‘Kill clause’ allows PM to cut off payments early

Finance Minister Mathias Cormann has refused to guarantee more workers won’t be kicked off JobKeeper as a Senate hearing turned fiery.

Finance Minister Mathias Cormann has refused to offer a guarantee that more workers will not be kicked off JobKeeper before the official expiry date and says there’s a “kill clause” in the legislation that allows it.

Despite the Prime Minister offering a guarantee that JobKeeper will last until the end of September on Friday, 120,000 childcare workers will no longer secure the wage subsidy from June under new changes.

The changes were allowed under the legislation because it grants broad powers to the Morrison Government to withdraw the JobKeeper payments.

For example, the legislation clearly states: “An entitlement to JobKeeper payment under this Part may be cancelled, revoked, terminated, varied or made subject to conditions by or under later legislation.”

During a fiery Senate hearing into COVID-19 in Canberra yesterday, Senator Cormann was grilled over the decision to kick childcare workers off the wage subsidy under a transition package announced on Monday.

“This guarantee that JobKeeper will be there and people can count on it, that isn’t really a guarantee at all is it,’’ Labor Senator Katy Gallagher asked.

Senator Cormann responded by saying he “completely disagreed with that”.

“JobKeeper will be there,’’ he said.

RELATED: Fury as childcare scheme ends early

Mathias Cormann faced a grilling in the Senate hearing. Picture: AAP Image/Lukas Coch

Senator Gallagher said that wasn’t the case if 120,000 childcare workers had just lost access to JobKeeper.

“What are they counting on?’’she asked. “Will you rule out other sectors losing JobKeeper?”

In response, Senator Cormann offered no guarantees.

“Well, again we have not made any decisions in relation to any other sectors. I am not aware of any sectors being in scope. But I qualify that by saying I am not aware at this point … of the findings and recommendations of the Treasury review,’’ he said.

“I won’t rule out adjustments at the end of a review. The Labor Party has called for adjustments. You’ve asked for casuals who don’t ordinarily earn $1500 to have their pay adjusted downwards. So don’t tell me you haven’t recommended any adjustments, you have.”

Childcare centres will not be left with nothing however, they will secure a transitional payment of 25 per cent of pre-COVID levels of revenue.

This is likely to be worth less than JobKeeper but is more flexible because it allows centres to use the money to pay for casuals who were previously not eligible for JobKeeper, particularly those working in after school hours care.

But he hinted the most likely future reform is consideration of casuals who are paid more under the flat rate $1500 JobKeeper payment than they previously earned, noting the Labor Party has also called for this reform.

“There may well be some further adjustments at the edges,’’ he said.

“Does that mean more people are going to get kicked off JobKeeper,’’ Senator Gallagher asked. “Is that code?”

On Friday, the Prime Minister told reporters that JobKeeper would not end early.

“The six months provision of JobKeeper has been set out in legislation and people can count on that,’’ he said.

Mr Morrison was then asked by a reporter: “You can guarantee that? That will be there until the end of September?”

“Yes,’’ he replied.