Coronavirus NSW: JobKeeper, JobSeeker payment changes announced
The JobKeeper payments will continue beyond their originally scheduled end date of September, although with some changes to avoid becoming a disincentive to work. SEE THE CHANGES.
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JobKeeper and the topped-up JobSeeker dole cheque will continue beyond September, but at a reduced rate to ensure the extra cash does not create a disincentive for returning to work.
The future of the $1500 a fortnight wage subsidy for employees stood down during the coronavirus crisis and the $550 supplement doubling the JobSeeker unemployment benefit was unveiled by Prime Minister Scott Morrison on Tuesday following a review.
He confirmed both supports will continue at their current rate until September 27 as planned, and will then be extended as a lower payment.
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JobKeeper will be split into two tiers depending on the amount of hours a person worked prior to the pandemic, effectively ending the current system where part time employees were paid the same flat rate as full time workers.
The second wave of coronavirus in Victoria and increased community transmission in NSW has highlighted the need for ongoing financial support, however the government will seek to target the cash after Treasury’s review of JobKeeper found the lucrative rates “potentially blunted” incentives to work as the economy recovers.
Treasury found about a quarter of the 3.5 million JobKeeper recipients had an income increase after going onto the payment. “In addition, the introduction of enhanced income support under JobSeeker may also be affecting incentives to work,” it said.
Current businesses eligible for JobKeeper had to demonstrate at least a 30 per cent decline in turnover in April compared to the previous year.
But Treasury has recommended a “better approach” to ensure hard-hit sectors continue to receive support was to “reassess eligibility” in October based on actual decline in turnover.
“This would target the most affected businesses and would reduce the proportion of the economy at risk of the adverse incentives of JobKeeper,” Treasury said. “It may also be appropriate at this juncture to consider reducing payments to wean off businesses from ongoing support.”
Treasurer Josh Frydenberg said the $70 billion JobKeeper scheme “met its objectives” by preventing widespread business closures and “putting a brake” on the job losses in late March.
“JobKeeper has been an economic lifeline to millions of Australians and that lifeline will be extended for those businesses that need it most,” he said.
Finance Minister Mathias Cormann said the program had been “well targeted” to businesses who suffered an average decline in turnover of 37 per cent in April compared to the previous year.
“The government recognises the need for JobKeeper to be extended. We are conscious that there will still be businesses that will continue to be severely impacted by the coronavirus crisis,” he said.
“But we also want to ensure that ultimately we can transition businesses back into a situation where they are able to pay for the wages of employees out of their income.”
The review found there were “many compelling arguments” to maintain JobKeeper until September 27, including that businesses had planned to access it for six months.