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JobKeeper and JobSeeker: What has changed?

What are the changes coming to JobSeeker and JobKeeper? Source: Getty
What are the changes coming to JobSeeker and JobKeeper? Source: Getty

Big changes are coming to both JobKeeper and JobSeeker this weekend. Here’s what it means for you.

JobKeeper

From 28 September, JobKeeper rates are falling for all recipients.

The $1,500 per fortnight flat rate of JobKeeper comes to an end and is replaced by two tiers of payments; If you worked 80 hours or more over a particular 28-day period, you will receive $1,200 per fortnight and if you worked less than 80 hours over the 28-day period, your JobKeeper payment will be just $750 per fortnight. Your employer will make the call as to which rate you qualify for based on their payroll records, using February or June this year as the measuring point for the 28-day period.

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Your employer will tell the ATO which rate you qualify for and then needs to pass that information on to you in writing.

In addition, employers need to re-test to work out if they still meet the 30% decline in turnover test – if they don’t, the business will no longer qualify for JobKeeper and the employees will get nothing (unless their employer takes the strain and starts to pay their wages in full).

Businesses and their staff that qualified for the first version of JobKeeper but who have seen an upturn in their trade since 1 July 2020 will lose out. If their turnover no longer meets the 30% decline test, they will lose access to JobKeeper and their staff will no longer get their fortnightly payments. This could lead some of these businesses to shed staff or close entirely if they are still impacted by the downturn but no longer impacted enough to qualify for JobKeeper.

There’s another sting in the tail. To retest their turnover, businesses need to look at their results for the July, August and September months and it will take time for many businesses to get their books up to date. As a result, the ATO is extending the time that employers have to pay JobKeeper for the month of October. Normally, employers need to pay their staff for the JobKeeper fortnights ended 11 October and 25 October but the ATO has extended that deadline out to 31 October so that businesses can be certain that they are entitled to JobKeeper. For employees, that could mean no JobKeeper payments are made until the end of October, which could cause real financial distress to many who rely on the payments to service debt, pay bills and put food on the table.

So, all Aussies currently on JobKeeper are going to take a haircut – the only question is how severe it will be.

For those who will lose access to JobKeeper, the question is will your employer pick up the slack or will you be laid off entirely? If the latter, you need to start applying for JobSeeker, which unfortunately is also being reduced at the end of the month (see below).

The only silver lining to the cloud for financially strapped Aussies is that many people on JobKeeper will now qualify for JobSeeker as well. If you are on the lower rate of JobKeeper, you may be entitled to claim up to $554 per fortnight in JobSeeker. Your combined fortnightly income from both would then be $1,304, just $196 per fortnight less than you got under the soon-to- be-retired $1,500 JobKeeper rate. People on the higher JobKeeper rate may also be entitled to a small JobSeeker top-up of up to $284 per fortnight, leaving them just $16 per fortnight worse off than now. In all cases, there are other qualifications that need to be met (such as the assets test) in order to get JobSeeker, so it would be sensible to start an application now to confirm your eligibility and to get the claims process in motion.

JobSeeker

The $550 Coronavirus supplement that was introduced back in March is to be cut from today (24 September) to just $250. This supplement will then continue at the lower rate through until the end of the year before being abolished altogether (based on current plans, though that could change).

So, those eligible for JobSeeker will see their payments cut from a maximum of $1,100 per fortnight (the $550 base figure plus the original Coronavirus supplement) to just $800 per fortnight.

In addition, the ‘assets test’ which was waived when Coronavirus first hit will come back into force. The assets test prevents those with assets over a certain limit from receiving JobSeeker, although your home is excluded from the test so those most likely to be hit are investment property owners. The assets test denies JobSeeker to single homeowners with assets of more than $268,000 in addition to their home, and to single non-home owners with assets of more than $482,500.

Finally, the ‘mutual obligation’ rules, which were also waived back in March, will return. Under these rules, JobSeeker recipients (excluding those in Victoria) will need to look for two jobs a week and may have their payments stopped if they fail to engage with employment providers.