The JobKeeper & JobSeeker explainer: Will your family’s income change soon?

by Finance Expert, Nicole Pedersen-McKinnon

Nicole Pedersen-McKinnon is a long-time Fairfax money columnist, television finance commentator, financial literacy educator, presenter and campaigner for better family finances. A mother of two children, she knows what may help families at this time. 

When COVID-concern hit our shores with a vengeance, way back in March, the government threw families hit by forced closures a lifeline. In fact, the analogy used to explain the multi-billion-dollar wage replacements was a “bridge” to the other side of the coronavirus crisis.

Well, that bridge becomes less of a four-lane highway and more of a swing bridge at the end of September.

Here’s what you need to know about the coming changes to the JobKeeper and JobSeeker income scheme, and about how you may be able to claim both of them.


What’s happening to JobKeeper

Under JobKeeper 2.0, it’s a straight handout haircut from a rate of $1500 to $1200, from September 28 until January 3, when it will drop again to $1000 for the next three months (3.5million people have been getting this).

But that’s the new full-time rate. Your rate will fall far further if you’ve so far been enjoying more than you previously earned: the amount for those working 20 hours a week or less will first decrease to $750 (on September 28) and then to $650 (on January 3).

On the positive, though, more businesses and therefore employees will now retain JobKeeper than the government first announced – in a surprise move, employers will only have to show a 30 percent decline in revenue for one quarter.

And, better still, more employees will also qualify as the baseline date to have been ‘on the books’ has been updated from March 1 to July 1.

Meanwhile, over at JobSeeker…


What’s happening to JobSeeker

To ‘keep it even’, $300 will also be slashed from JobSeeker (matching the initial reduction for full-time JobKeeper recipients).

Now, this cut comes in the form of a coronavirus supplement shrunk from $550 to $250 (2 million Australians are receiving this top up to their benefit). At this stage, this supplement is only guaranteed until the end of December, too.

The good news is there’s also been a change that means you can earn an extra $300 without affecting your benefit. So you could use this new income-free threshold to combat the $300 payment drop.


How you could claim both the Job ‘Keeper’ and ‘Seeker’

The thing is that the income cut-off for JobSeeker is $1256 a fortnight… and from the end of September, both JobKeeper tiers – for full-time and part-time workers – will be below this. Well below it for part-time workers.

This means it may even be possible to top up your wage replacement payment with the benefit. Modelling suggests this may even get you close to the $1500 you could be receiving today.

Indeed, this appears to be a deliberate strategy by Treasury as it seeks to switch people off JobKeeper and onto JobSeeker. It has even tabled forecasts for the number of dual recipients ahead of getting people onto the JobSeeker, permanent payment source.

“Employees receiving the JobKeeper payment may be eligible for other government assistance, including JobSeeker, subject to the eligibility requirements for those payments,” a Treasury spokesman confirmed.

You report your JobKeeper payments when you update your income to Centrelink.

But you’ll have to get job hunting. The so-called mutual obligation to apply for work is back, at just four jobs a month initially.

Job hunting, studying, starting a new business and volunteering all count as eligible, ‘work-related’ activities within the Child Care Subsidy. This means that, when you enrol your child in the child care, you may be able to claim the subsidy while looking for a job.  


What about child care?

Families who have lost income and are experiencing financial hardship may be eligible for additional support through what’s called the Additional Child Care Subsidy (temporary financial hardship).

In the rest of the country, it’s back to ‘business as usual’ with normal Child Care Subsidy conditions applying. Having said that, the activity test that determines how much money you get back has been eased until April 4, 2021. Families whose employment has been impacted by COVID-19 will get up to 100 hours per fortnight of subsidised care during this period, so it’s not as bad as you may have initially thought.


Need assistance with working out how to maximise your Child Care Subsidy? Our Family Support Team is ready to help – contact them on 1800 314 517.

*Information provided in this article is general in nature and does not constitute financial advice. Before making any decisions, families should take into account their individual circumstances and consult with their professional advisors.