As broadly expected, the Government has confirmed JobKeeper and the JobSeeker Coronavirus Supplement will be extended from their scheduled end dates in September, a move aimed at protecting jobs and incomes, as well as supporting Australia’s rebooting economy and real estate markets. 

The JobKeeper payment has been given a six-month lifeline until 28 March 2021 but will be reduced twice from 28 September 2020. The JobSeeker payment will be extended to 31 December 2021, however the COVID-19 Supplement will be reduced to $250 per fortnight. 

The JobKeeper adjustment

From 28 September, the JobKeeper payment will be adjusted to $1,200 per fortnight until 4 January and then $1,000 until 28 March for those who worked 20 hours or more per week in February this year. The payment is currently $1,500 a fortnight.

JobKeeper will continue to be available to eligible businesses and not-for-profits until 28 March 2020. These businesses, however, will be required to demonstrate a 30% revenue loss for the June and September quarters to be eligible for the payment in the December quarter. 

The JobSeeker supplement 

The JobSeeker Coronavirus Supplement will be extended from 25 September to 31 December but at the reduced rate of $250 per fortnight, which is down from $550. Also, the government has reinstated means-testing for the income supplement. 

Under the changes, job seekers will be required to conduct at least four voluntary job searches per month and at least one phone or online interview with an employment agency. Failure to meet these obligations, or the refusal of a job offer will be penalised with a payment suspension.

Prime Minister Scott Morrison said the extra assistance would continue supporting hundreds of thousands of Australians who are without work and offer businesses and their workers a lifeline to not only get through this crisis but recover on the other side. “We will have Australian’s backs as we face the ongoing impacts of COVID-19,” the Prime Minister said.

John Tancevski, Chief Executive of Community First Credit Union, says the extension of both programs was widely anticipated and makes sense given that many workers won’t have had their jobs reinstated by the end of September. 

“The economy is starting to reboot but ending these income support measures in September would have been too early, especially with the second wave of COVID-19 cases in Victoria and the flow on risks to NSW a threat to the recovery.”

The Government estimates extending JobKeeper will cost around $16 billion and $3.8 billion for the JobSeeker extension. These costs combined with an extra $2 billion of Federal spending on the apprentice subsidies and JobTrainer announced in the middle of July[i] means the Federal Government has injected a total extra stimulus of around $22 billion into the economy in the last few weeks. 

More stimulus measures are expected in the various upcoming Government budget statements, while some experts are predicting the 2022 income tax cuts will be fast-forwarded. 

“By maintaining these stimulus measures, more people will stay in work, which will also underpin property sales and rental markets as more Australians will have the confidence to get on with their lives,” said John Tancevski.

For further Information

JobKeeper Extension (https://treasury.gov.au/coronavirus/jobkeeper/extension)

ATO JobKeeper Factsheet (https://www.ato.gov.au/general/JobKeeper-Payment/)

JobSeeker Extension and Changes to the COVID Supplement (https://treasury.gov.au/sites/default/files/2020-07/Fact_sheet-Income_Support_for_Individuals.pdf

 

 

Last updated: 17 August 2020

The information contained in this article is only correct at the point of time of publication. It is general information and has been prepared without taking into account your personal circumstances, objectives or needs. Please consider if this information is right for you before making a decision to acquire any product.