JobKeeper, JobSeeker payment rates slashed

Treasurer Josh Frydenberg and Prime Minister Scott Morrison have announced a big extension to JobKeeper.

Treasurer Josh Frydenberg and Prime Minister Scott Morrison have announced a big extension to JobKeeper. Photo: ABC News/Nick Haggarty

The JobKeeper and JobSeeker payments will be trimmed back after September, as the federal government finally lays out its plan for ongoing COVID-19 income support.

Ahead of Thursday’s ‘mini-budget’ economic update, Prime Minister Scott Morrison and Treasurer Josh Frydenberg confirmed the cuts to both programs.

As revealed on Tuesday morning, the JobKeeper wage subsidy will continue past its scheduled September expiry date, with support extended to March 2021.

However, the payment, which had been a flat $1500 per fortnight for all employees – regardless of their prior income – will now change to a two-tier system.

Full-time workers will receive $1200 and part-time employees who work less than 20-hours a week will get $750 from September 28 to January 3.

It’ll be revised down again to $1000 for full-time workers and $650 for part-time workers between January 4 and 28 March 2021.

Some 3.5 million Australians have received JobKeeper so far, but Mr Morrison and Mr Frydenberg said on Tuesday they expected around one million to continue needing it by March.

JobSeeker, the rebadged payment formerly known as Newstart, was temporarily boosted by $550 per fortnight, effectively doubling the allowance.

That coronavirus supplement will be cut to $250 from September until the end of December, effectively taking the full payment back to around $800 from the increased $1100 per fortnight.

However, the income-free area has been increased to $300 – which means workers can work and earn wages to that amount without affecting their payments. Mr Morrison said this was done to encourage people to apply for and accept jobs.

The assets test and liquid assets waiting period will be placed back on from September 25.

The PM resisted questions on whether the JobSeeker payment would return to its pre-COVID levels beyond 2021.

We will make further decisions about JobSeeker at closer to the end of the year or potentially even in the budget,” Mr Morrison said.

“It is our intention that we would expect that there would be likely a need to continue those supplements post-December.”

Mutual obligations for JobSeeker have also been reinstated, with recipients required to look for at least four jobs a month, starting from August 4 – when millions of people in Melbourne will still be in lockdown.

Penalties will apply to those who do meet those requirements.

Mr Morrison said the new obligations were not “onerous”, but “fair expectations”.

“It’s not unreasonable once we get into this next phase for there to be some basic requirements,” he said.

Mr Frydenberg said the extension of JobSeeker would be worth some $3.8 billion.

Mr Frydenberg called JobKeeper “an economic lifeline to millions”, but Treasury and the government said the current level of the twin payments were potentially creating “adverse incentives” to getting business back to full speed.

Treasury claimed the current quantum of support “dampens incentives to work” and “keeps businesses afloat that would not be viable without ongoing support”.

“A three-month review of the JobKeeper payment found the scheme met its objectives, preventing widespread business closures and putting a brake on the job losses that commenced in the second half of March,” said Mr Frydenberg on Monday.

“That lifeline will be extended for those businesses that need it most.”

More to come.

Topics: Jobkeeper
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