The JobKeeper payment will be reduced from September but extended until March 2021 with those working part time to receive less than those working full time, while the JobSeeker payment will be reduced from September.
The much anticipated details regarding the future of these payments were unveiled by Prime Minister Scott Morrison today, with the full costing details to be revealed on Thursday.
The JobKeeper payment will be reduced from $1500 a fortnight down to a new rate of $1200 beyond the current scheme’s late September expiry date, but will be lower ($750 a fortnight) for those working part time — classified as less than 20 hours a week. From 3 January and for the March 2021 quarter, it will drop again to $1000 for those working more than 20 hours a week and $650 a fortnight for those deemed to be ‘part time’.
Currently, those on JobSeeker receive a Coronavirus supplement of $550 a fortnight, but this will be cut to $250 a fortnight from September. The maximum those on this payment will then receive will be around $800. JobSeeker was previously known as Newstart and paid around $560 a fortnight, which was widely seen as inadequate. The Coronavirus supplement raised this to $1100 a fortnight.
Treasurer Josh Frydenberg said the extended program will cost about $16 billion over the next six months.
Morrison said the the Jobkeeper payment has been “doing it’s job and will continue to do its job through the decisions we’re announcing today.”
“Already just over $30 billion has been provided in support through the JobKeeper program to almost a million businesses (960,000 thereabouts) supporting some 3.5 million employees.”
The eligibility criteria for businesses to see their staff receiving JobKeeper will also change for payments post the 28th of September. Businesses will need to prove they have experienced a 30 per cent reduction in turnover across the past two quarters and into the next quarter. The eligibility test will be reapplied at the start of January 2021 having been done again at the end of September 2020.
Frydenberg explained the eligibility test during the press conference: He said employers will need to demonstrate they have met the relevant decline in turnover in both the June and September quarters to be eligible for the JobKeeper payment in the December quarter. They will need to again demonstrate that they have met the relevant decline in each of the previous three-quarters ending on 31 December 2020, to remain eligible for the payment in the March quarter 2021.
He said Treasury expects the number of people on JobKeeper to reduce substantially as the economy improves — from around 1.4 million people still eligible in the December quarter of 2020 to one million in the March 2021 quarter.
Currently, 30 per cent of the private sector workforce is supported by Jobkeeper, Frydenberg said today.
He noted that 47.1 per cent of recipients receiving JobKeeper were women, and compared it to the 44.9 per cent of the private sector workforce that women occupy.
The JobSeeker obligations will also restart from the 4th August, with those on the payment having mutual obligations to take a job if it’s offered.
The PM said further decisions about the JobSeeker payments will be determined later on in the year.
“We will make further decisions about JobSeeker at closer to the end of the year or potentially even in the budget,” he said. “It is our intention that we would expect that there would be likely a need to continue those supplements post-December.”
He said the JobKeeper requires a “six month period for employers to be able to plan”. But for JobSeeker, “their plan is there and that is for us to assist them where possible to get them back into employment.”