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Jobskeeper And JobSeeker – What You Need To Know

Jobskeeper And JobSeeker – What You Need To Know

The Government has announced a number of changes to income support, predominantly JobSeeker arrangements and the Coronavirus supplement.

Previously announced and implemented changes to JobSeeker and the payment of the Coronavirus supplement were scheduled to come to an end on 25 September 2020.

The changes announced include:

  • increasing the income free area for the income test and adjusting the income test taper rate
  • amending the partner income test
  • reintroducing mutual job obligations
  • reintroducing the assets test and liquid assets waiting period
  • extending payment of the Coronavirus supplement to 31 December 2020, and
  • reducing the amount of Coronavirus supplement payable.

Relaxed eligibility criteria will continue to apply to sole traders, individuals who have been stood down or have lost their job, and casual workers, subject to meeting the income and assets test. Each of the changes is summarised in more detail below:

JobSeeker income test changes

Changes have been announced that effect the income free area and taper rate, and the Partner income test.

Income free area and taper rate

From 25 September 2020 until 31 December 2020, the income free area will increase from $106 per fortnight to $300 per fortnight. This means that a person is able to receive $300 per fortnight in income before their entitlement to JobSeeker is reduced under the income test.

Entitlement to Job Seeker will reduce by 60c for each dollar of income received per fortnight in excess of this threshold. JobSeeker recipients who are principal carer parents will continue to have a taper rate of 40c for each dollar of income that exceeds the threshold.

Current arrangements continue until 25 September 2020, meaning that JobSeeker payments reduce by 50c for each dollar earned between $106 and $256 per fortnight and 60c in the dollar for income that exceeds $256 per fortnight.

Partner income test

Additional changes will be made to the Partner income test. From 25 September 2020, a JobSeeker recipient’s partner will be able to earn up to $3,086.11 per fortnight (or S80.238.89 pa) before entitlement to JobSeeker reduces to nil.

The taper rate increases to 27 cents (from 25 cents) for each dollar of partner income that exceeds $300 per fortnight. Although partner income will reduce entitlement at a slightly increased rate, this is offset by the increase in the income test threshold to $300 per fortnight. The effect is that no JobSeeker recipients will have a reduced entitlement as a result of this change.

Where a person in receipt of JobSeeker has income assessed for social security purposes from other sources, this may further reduce the rate of JobSeeker payable. This means that a partner’s income may actually be less than $3,086.11 per fortnight at the point at which the rate of JobSeeker payable to the person is nil.

Waiting periods and the assets test

From 25 September 2020, the assets test will be reinstated. This will apply to both new and existing recipients of JobSeeker:

The Liquid Assets Waiting Period will also be reinstated from this date, however, other waiting periods will continue to be waived until 31 December 2020 including the

  • Ordinary Waiting Period
  • Newly Arrived Residents Waiting Period, and
  • Seasonal Work Preclusion Period

The Income maintenance period and compensation preclusion period were not waived in response to COVID-19 and continue to apply. For many receiving redundancies or lump sum payments upon termination of employment, this may mean that they may not be immediately eligible for JobSeeker payment.

Reintroducing mutual obligation requirements

In recognition of the difficulty and risks for many associated with fulfilling the mutual obligation requirements associated with Job Seeker, the requirements were temporarily suspended until 8 June 2020. Since this time, the mutual obligation requirements have been gradually reintroduced. This gradual reintroduction of requirements will continue.

Coronavirus supplement

Payment of the Coronavirus supplement has been extended to 31 December 2020, however, the amount of supplement payable will reduce. Currently, the supplement is paid to eligible recipients at a rate of $550 per fortnight but will reduce to $250 per fortnight from the reporting period commencing 25 September 2020, Centrelink will advise an individual of their reporting period.

The supplement will be paid to both new and existing recipients of eligible payments. Provided a person has at least some entitlement to an eligible payment, the full amount of the supplement will be received

To be eligible for the supplement, an individual must be entitled to at least a partial payment of a specific payment, including:

  • JobSeeker Payment
  • Youth Allowance
  • Parenting Payment (Partnered and Single)
  • Austudy
  • ABSTUDY Living Allowance, and
  • Farm Household Allowance

Make sure you get further advice from Centrelink in relation to this issue.

JobKeeper and Job Seeker – how they will work together

Current arrangements that are in place until 25 September 2020 mean that it is unlikely that a person will be receiving both JobKeeper and JobSeeker.

This is because amounts of JobKeeper received are reportable as income for social security purposes, meaning a person is likely to be ineligible under the income test.

However, the reduced rates of JobKeeper from 25 September 2020 may mean that individuals are eligible and in receipt of both payments.

A person who is in receipt of an income support payment and has employment income (including JobKeeper) that reduces entitlement to nil will be eligible to retain their concession card for a period (not yet specified) in case income reduces and the person is re-eligible for income support.

As the JobKeeper scheme is phased out in the future and eligible individuals anticipate a transition to JobSeeker, Services Australia will be able to accept advance applications in an attempt to minimise any delay in claim approval and payment.

More information about these arrangements is yet to be released.

SOURCE: MLC Technical

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Disclaimer: This information is general information only.  You should consider the appropriateness of this information with regards to your objectives, financial situation and needs. Past performance does not guarantee future returns.

Chris Carlin is an Authorised Representative (No. 1235031 for financial services and No. 514748 for credit) and Master Your Money Now Pty Ltd ABN 65 627 229 681 is a Corporate Authorised Representative (No. 1265677 for financial services and No. 514747 for credit) of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523

 

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