Millions of Australians will continue to receive JobKeeper and JobSeeker beyond their original end date in September as part of an extra $20 billion in government stimulus.
Prime Minister Scott Morrison and Treasurer Josh Frydenberg told reporters on Tuesday that both support measures would be extended to help households and businesses recover from the coronavirus recession.
But both payments will be cut, businesses will have to meet new turnover tests, and JobKeeper will be split into two tiers – one for full-time workers and one for part-time workers.
With that in mind, here’s everything you need to know about the next phase of income support payments.
What is the new JobSeeker rate?
As of September 25, the maximum fortnightly rate for a single household will drop from $1110 to $810.
That includes the energy supplement but ignores rent assistance.
How does that work? What changes were made?
On March 22, the federal government effectively doubled the unemployment benefit JobSeeker when it introduced a temporary Coronavirus Supplement of $550 a fortnight.
The temporary supplement was paid on top of the base JobSeeker rate, which is equal to $565.70 a fortnight for someone without children, and $612 a fortnight for someone with children.
On Tuesday, the government announced the current arrangements and eligibility requirements will stay in place until September 24.
But, as of September 25, the fortnightly Coronavirus Supplement will drop from $550 to $250 – where it will stay until at least December 31.
The future of the Coronavirus Supplement beyond that date is undecided, but the Prime Minister said “we would anticipate there would need to be some continuation of the COVID Supplement payment post-December”.
Meanwhile, the JobSeeker base rate will stay at its current level.
This is why Tuesday’s announcement effectively means the unemployment benefit was cut by $300 a fortnight.
Right. And what if I’m working a couple of shifts? How will that affect how much I receive on JobSeeker?
In addition to adjusting the Coronavirus Supplement, the government has modified the income taper test, reintroduced means testing, reduced waiting times, and brought back job-seeking requirements.
After Treasury found the enhanced JobSeeker payment was reducing the incentive to work, the government increased the income-free area from $106 a fortnight to $300 for JobSeeker recipients, and from $143 a fortnight to $300 for Youth Allowance recipients.
This means people can earn up to $300 a fortnight and still receive the maximum rate of JobSeeker and Youth Allowance.
On top of that, the government is changing its taper rates.
Previously, JobSeeker recipients lost 50 cents in income support for every dollar they earned between $106 and $256 per fortnight – and 60 cents for every dollar they earned above $256 per fortnight.
Meanwhile, Youth Allowance recipients lost 50 cents for every dollar they earned between $143 and $250 per fortnight, and 60 cents for every dollar earned above $250 per fortnight.
From September 25, these tests will be replaced with a single income test of 60 cents for every dollar of income earned above $300 per fortnight – for recipients of both JobSeeker and the Youth Allowance.
That’s unless you’re a principal carer parent.
In that case, the old income test of 40 cents for every dollar of income earned above $106 a fortnight will continue to apply.
Importantly, the Coronavirus Supplement will continue to be excluded from JobSeeker income tests, which means anyone eligible for the supplement will still receive the full amount ($250 as of September 25).
How will my partner’s income affect how much I get via JobSeeker?
From September 25, the amount your partner can earn without it affecting your JobSeeker payments will increase.
At the moment, recipients lose 25 cents in income support for every dollar their partner earns above $996 a fortnight.
From September 25, that will change to 27 cents for every dollar they earn above $1165 a fortnight.
Will the government continue to waive assets tests?
The old assets tests for JobSeeker will be reintroduced on September 25 for new and existing recipients.
And the Liquid Assets Waiting Period will also be reinstated for all payments, meaning people with more money in the bank will have to wait for longer to receive them.
OK. What if I’m a sole trader, permanent employee who has been stood down, a casual or contract worker, or self-employed?
Provided you meet the income and assets tests, you will continue to receive the payments until at least December 31.
Right. And will I have to apply for jobs to receive the payments?
Yes. From August 4, JobSeeker recipients must reconnect with a job service provider, agree to a jobs plan, undertake four job searches a month, and participate in training or other activities if it safe to do so.
The government will also penalise you for refusing a job if you are offered one – unless you can provide a reasonable excuse. You can find out more details here.
OK. And what’s happening to JobKeeper?
JobKeeper will be extended until March 28, 2021, but the rate will also be cut.
And after Treasury found a quarter of recipients were paid more via JobKeeper than they earned previously – netting an average pay rise of $550 a fortnight each – the government has introduced a tiered payment system.
The current rate of $1500 a fortnight will be maintained for all eligible employees (roughly 3.5 million people) until September 27.
From September 28 until December 31, it will drop to $1200 a fortnight for full-time workers and $750 a fortnight for part-time workers.
From January 4 until March 28, 2021, it will drop to $1000 a fortnight for full-time workers and $650 a fortnight for part-time workers.
For the purposes of the scheme, full-time workers are defined as employees who worked an average of more than 20 hours a week in February 2020.
Part-time workers are defined as employees who worked an average of less than 20 hours a week in February 2020.
Will all businesses continue to receive JobKeeper payments beyond September?
No. Only businesses that continue to meet the turnover test will continue to receive JobKeeper payments.
To be eligible for the second phase of payments, businesses must prove their actual GST turnover fell significantly during the June and September quarters, relative to comparable periods such as the corresponding quarters in 2019.
And to be eligible for the third phase, they must prove their turnover fell significantly during the June, September and December quarters, relative to comparable periods.
Specifically, businesses with aggregated turnover of more than $1 billion must demonstrate a 50 per cent decline in turnover in each relevant quarter; smaller businesses must prove a 30 per cent plunge; and charities and not-for-profits must show a 15 per drop.