JobKeeper in jeopardy: what you should do if scheme ends early
JobKeeper is paying millions of Australian workers $1500 a fortnight, but growing talk of changes that may end the six-month scheme sooner for some means you need to have a plan.
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Surging speculation the $130 billion JobKeeper wage subsidy scheme will end early is sparking financial fears about what happens next.
More than 6.1 million Australians are now receiving $1500 a fortnight from the Federal Government through 835,000 businesses taking part in the six-month scheme, which is increasingly coming under fire.
There have been conflicting calls to scale it back, stop it altogether or expand it amid reports of rorting, scams and a lack of fairness around eligibility.
Deloitte Access Economics last week suggested tweaks such as stepping down JobKeeper payments over time, phasing them out as a business’s turnover increased, or targeting only the hardest-hit sectors such as air transport, food, accommodation, arts and recreation.
“Every taxpayer dollar is vital – and so it is vital that we make sure the $130 billion this nation is spending gets maximum bang for buck,” Deloitte Access Economics head Pradeep Philip said.
Whatever happens in the coming months, millions of people currently receiving JobKeeper payments should start planning for life without it, financial specialists say.
MBA Financial Strategists director Darren James said many households were spending less money because of lockdowns and should aim to maintain these habits.
Extra savings should be stashed away so “whatever happens at least you have got a buffer”, he said.
“People should take control – this is a situation where it could be easy come, easy go. Casuals may not get the same work when JobKeeper ends.”
Mr James said squirrelling away spare JobKeeper income now could provide a safety net for future issues with credit cards or other loans, or for boosting superannuation.
“The only reason why it would end early is because things would be a lot better than the government originally thought,” he said.
JBS Financial Strategists CEO Jenny Brown said some businesses had been qualifying for the scheme through “creative accounting, which is not in the spirit of the whole agreement”.
“JobKeeper was put there to help businesses retain good staff and keep them employed – do not rort the system,” she said.
Ms Brown said people should prepare for an end to JobKeeper by examining all their household spending to find unnecessary costs.
“While it’s good to support local cafes and businesses doing it tough, be aware of how much you are spending,” she said.
“Discounts are starting to come back, so look out for specials when shopping.”
Ms Brown said people who were receiving more money from JobKeeper than their previous wage should be very careful and “don’t spend it”.
“It’s really hard to go back to what you were on if you start getting used to that new amount of money.”
PREPARE FOR PAYMENT CUTS
• Examine all expenses to look for small savings that can add up.
• Write down a plan now about how you can respond, rather than panic if the payments suddenly disappear.
• If JobKeeper pays more than your wage, save rather than spend it so you won’t have problems readjusting.
• Don’t cheat the system. It uses Tax File Numbers that make your income easier to track, and you will have to repay money with penalties.
Originally published as JobKeeper in jeopardy: what you should do if scheme ends early