From late September, payments of the $1,500 jobkeeper wage subsidy and $550 coronavirus supplement will change.
Businesses will need to requalify for jobkeeper based on their actual earnings and both payments will be cut, with lower payments hitting hardest for those who ordinarily worked fewer than 20 hours a week before the Covid-19 recession.
So how much will you receive when the changes are made?
Jobkeeper eligibility
Jobkeeper, which was due to expire on 27 September, will now be extended until 28 March 2021.
To continue receiving the payment on behalf of employees from September, businesses and not-for-profits will have to reassess the downturn in their actual GST turnover in the June and September quarters to receive payments from 28 September to 3 January; and again for each of the June, September and December quarters to receive payments from 3 January to 28 March.
The required decline in turnover remains the same:
50% for those with an aggregated turnover of more than $1bn.
30% for those with an aggregated turnover of $1bn or less.
15% for Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities).
Other eligibility rules for businesses (including sole traders), not-for-profits and their employees remain unchanged from when the program was announced in March. The jobkeeper extension is open to new recipients – but existing eligibility requirements state they must have been employed on 1 March 2020.
Jobkeeper rates down
From 21 July to 27 September, the rate of $1,500 per employee per fortnight will continue to apply.
But from 28 September a tiered system will reduce payments for people who ordinarily worked fewer than 20 hours a week, and the rate of jobkeeper will be tapered to reduce over time.
The new rates are:
From 28 September to 3 January: jobkeeper will be $1,200 a fortnight for people who ordinarily worked 20 hours or more a week; and $750 for other recipients.
From 4 January to 28 March: jobkeeper will be $1,000 a fortnight for people who ordinarily worked 20 hours or more a week; and $650 for other recipients.
The 20-hour test requires people to have been “working in the business or not-for-profit” or “actively engaged in the business” for 20 hours or more a week on average in the month of February 2020.
However, the commissioner of taxation will have discretion to use a different test where an employee’s hours were not usual during February 2020, for example if they were on leave, volunteering during the bushfires or not employed.
Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the jobkeeper payment (before tax).
Jobseeker coronavirus supplement down
In March the government introduced a $550 fortnightly coronavirus supplement, which was applied to recipients of jobseeker, youth allowance, parenting payments, the farm household allowance and special benefit.
From 25 September the coronavirus supplement will be extended to 31 December but cut to $250 a fortnight. For a single jobseeker recipient receiving a total of $1,115 a fortnight, the payment will therefore be cut to $815 a fortnight.
Both existing and new income support recipients will continue to be paid the coronavirus supplement.
People receiving jobkeeper will also be able to receive the jobseeker payment. Someone on the $1,200 rate could receive up to $276 a fortnight in jobseeker, while those on the $750 rate of jobkeeper could get a top-up of $546.
There are also changes to means testing:
From 25 September the assets test and the liquid assets waiting period will be reintroduced and the jobseeker payment partner income test will increase from 25 cents for every dollar of partner income earned over $996 per fortnight to 27 cents for every dollar of partner income earned over $1,165 per fortnight.
The income-free allowance for jobseeker payment and youth allowance will be raised from $106 a fortnight to $300 a fortnight. Instead of two taper rates for income above $107 (a reduction of 50c for every dollar earned) and $251 (60c per dollar), a single taper of 60c per dollar for income above $300 will be introduced.
These changes mean individuals will be able to earn up to $300 a fortnight without forgoing any jobseeker payment or affecting their eligibility for the coronavirus supplement.
Taper rates decrease jobseeker base payments, but not the coronavirus supplement. All jobseeker recipients are entitled to the entire coronavirus supplement, meaning a single person receiving jobseeker will not lose both the base rate and supplement unless they earn more than $1,257.50 a fortnight.
What will all this cost the government?
The cost of the jobkeeper extension is estimated at $16.6bn, and the extension of the coronavirus supplement to jobseeker at $3.8bn.
What about mutual obligation?
From 28 September, the government will reintroduce welfare suspensions and penalties for those who do not meet their mutual obligations.
The main requirements will be:
attending meetings with an employment services provider
agreeing to a job plan
participating in activities such as training courses or education, or work for the dole for people unemployed longer than 12 months
actively looking for at least eight jobs a month
and you must accept an offer of “suitable work” as determined by your job agency and Services Australia
People who do not meet these requirements can have their payments temporarily suspended by their job agency. Those who transgress multiple times can face payment reductions or cancellations.
The rules apply to people in the jobactive, online employment services, disability employment services and ParentsNext programs.
Previously, from 4 August 2020, jobseekers have been expected to meet appointments with providers, agree to a job plan, undertake a job search and attend activities if it is safe to do so. If a jobseeker is unable to meet these requirements, no payment suspensions or financial penalties will be applied.
The government expects jobseekers receiving an income support payment to accept any offer of suitable paid work.
From 4 August, if a jobseeker refuses an offer of suitable employment without a valid reason they may have their payment cancelled, and may need to wait for four weeks before they can reapply for income support.
