Coronavirus: JobSeeker vs JobKeeper — how they both work

Australians may now qualify for two quite different government-funded payments. Here’s how they differ.

The new subsidies will keep people in work.

Hundreds of thousands of Australians affected by the coronavirus pandemic (many who have never lost their job before or been on welfare) may qualify for two quite different government-funded payments. Here’s how the JobSeeker and JobKeeper payments work and who’s eligible.

What is the JobSeeker payment and who is eligible?

If you’re between the age of 22 and 66, unemployed and looking for work, you could be eligible for the JobSeeker payment (formerly known as Newstart). This can include if you’re doing part-time or casual work. It’s also available if you’re sick or injured and can’t do your usual work or study for a short time.

People queue outside a Centrelink office in Brisbane. Picture: AAP.

Australian residents qualify for the payment but if you’re a newly arrived resident you may be eligible too – though will likely have to wait two to four years before receiving your first income support payment. There are more details on the residence rules at Services Australia

How much is the JobSeeker payment?

The JobSeeker payment varies between $565.70 per fortnight for a single person with no children and $790.10 per fortnight for a single principal carer who does not have to adhere to the government’s mutual obligation requirements*.

Check those details here.

Is the JobSeeker payment means tested?

The amount of government income support you receive reduces depending on how much your assets are worth, what your partner’s income is and what your income is. If you’re single with no children, your JobSeeker payment reduces to zero once your income (government support plus private income through casual or part-time work) reaches $1086.50 per fortnight.

For more on income and assets limits, go here.

■ Mutual obligation requirements (going to job appointments or completing certain activities in order to receive your income support) for Australians on the JobSeeker payment have been suspended until April 27 due to the coronavirus pandemic.

If I’m on the JobSeeker payment, do I qualify for anything else? What about the new coronavirus supplement?

If you receive the JobSeeker payment you will also get the temporary $550 per fortnight coronavirus supplement for up to six months. It will begin hitting your chosen bank account automatically from 27 April. This will come on top of your existing income support payment/s.

That means if you’re single with no children, you could receive $1115.70 per fortnight in income support (JobSeeker plus coronavirus supplement).

Gosford businesses close as more shutdowns occur. Picture: AAP.

What’s the difference between the JobSeeker and JobKeeper payments? If I’ve been a casual employee with a business for under 12 months, will I get the JobKeeper or JobSeeker payment?

The Morrison government has announced the new JobKeeper payment or wage subsidy, a $70bn scheme that will be rolled out during the coronavirus pandemic. It’s designed to help businesses and employees impacted by the coronavirus and is delivered via the tax system (the JobSeeker payment is delivered via the welfare system).

If you’re a casual who has worked for your boss for less than 12 months, you won’t be eligible to receive the JobKeeper payment but you may be able to get the JobSeeker payment. The JobSeeker income and assets limits apply.

What is the JobKeeper payment and who is eligible?

The JobKeeper payment is available to businesses with turnovers of up to $1bn that have their turnover reduced by more than 30 per cent compared to the same time last year (over a period of at least a month). Businesses with a turnover of more than $1bn will have to show their turnover has been reduced by 50 per cent compared to the same time last year. The major banks are not eligible.

The Australian Taxation Office will have “flexibility and discretion” to allow some other businesses that don’t meet the turnover threshold to apply.

Cafe owner Marc Zheng serves a takeaway coffee at Le Petit Tarte Cafe in Sydney. Picture: AAP.

Not-for-profit entities (including charities) and self-employed individuals that meet the turnover tests for businesses can also apply.

Employees currently employed by the eligible employer, including stood down or rehired workers, or who were employed by the employer at 1 March are eligible.

You must be a full-time, part-time or long-term casual employee (employed regularly for longer than 12 months as at 1 March), at least 16 years old and an Australian citizen.

Permanent visa holders, protected special category visa holders, non-protected special category visa holders who have been residing continually in Australia for at least a decade or more or a special category (subclass 444) visa holder are also eligible.

You can only get the JobKeeper payment from one employer. 

How does the JobKeeper payment work? Is the JobKeeper payment tax free?

If an employer is eligible, they will be paid $1500 per fortnight by the government per eligible employee. The employees will receive the $1500 per fortnight, before tax, and employers can top-up the payment. It is not tax free.

The JobKeeper payment will either help subsidise an employee’s income, pay for all of an employee’s income or – where the employee earns less than $1500 per fortnight before tax – pay for more than the employee’s usual income.

There’s more on the payment process and how employers can apply for the scheme here. Employers will start receiving the JobKeeper payments in the first week of May, which will be backdated to 30 March.

What is the new partner income test for the JobSeeker/coronavirus supplement?

As we’ve mentioned, there is a partner income test for the JobSeeker payment, which means you must pass that test to be eligible for the coronavirus supplement.

Under the previous arrangement, if your partner did not receive a pension, your JobSeeker payment reduced by 60 cents for every dollar they earned over $994 per fortnight.

In other words, if your partner earned about $48,000 or more annually, you were not eligible for the JobSeeker payment and therefore you were not eligible for the coronavirus supplement.

The partner income test threshold has as of March 30 been lifted from $48,000 to $79,788.80. That means the income test cut-out for the JobSeeker payment is now $3068 per fortnight.

This is a temporary change and will operate over the six months the coronavirus supplement is available.

Sources: Services Australia, business.gov.au