JobKeeper and JobSeeker payments: What has changed?

Out-of-work Australians will have their income support cut to $815 a fortnight after September and be forced to apply for jobs to hold onto their benefits following a federal government shake-up of economic supports.

The extra coronavirus supplement available to those on the dole will be reduced in October to $250 a fortnight, down from $550, in addition to the base JobSeeker payment of $565.70. This extension will cost $3.8 billion, bringing the total spent on the supplement to $16.8 billion.

The new rate will be paid until the end of the year for those unable to find work, but Prime Minister Scott Morrison has committed to reviewing the payments in a few months and has signalled extra support is likely into 2021.

Those wanting to receive the benefits are also required to jump through extra hoops. From August onwards, people will be required to apply for four jobs a month. The assets test and Liquid Assets Waiting Period, which requires people with cash reserves to face a wait of up to 13 weeks for support, will be reintroduced in late September.

The JobSeeker partner income test will also rise from 25c for every dollar earned over $996 a fortnight to 27c of every dollar earned over $1165.

However, individuals will be able to earn up to $300 a fortnight without affecting their payments, up from $106.

There have also been major changes for those on the $70 billion wage subsidy scheme JobKeeper, which will be extended at a total cost of $86 billion until March 28 next year.

While the current $1500-a-fortnight payments will continue until September 27, after this point the system will pay workers in "two tiers", depending on their pre-pandemic hours until the end of March 2021.

Those who worked full-time before March 2020 will have their payments cut to $1200 from September 28 and down to $1000 from January 4.

Part-time workers, which includes those who worked fewer than 20 hours a week, will have their payments reduced to $750 and then to $650 over the same periods.

Businesses will have to show their GST turnover has fallen significantly in the June quarter and the September quarter relative to the same periods in 2019 to be eligible for the JobKeeper extension to January 3.

Businesses with turnover of $1 billion or more need to prove a 50 per cent decline in turnover, while those under this threshold need to show a 30 per cent decline. The same tests apply to those who are self-employed. Charities and not-for-profits, excluding schools and universities, need to show a 15 per cent drop.

Get our Morning & Evening Edition newsletters

The most important news, analysis and insights delivered to your inbox at the start and end of each day. Sign up to The Sydney Morning Herald’s newsletter here and The Age’s newsletter here.