Are JobKeeper and JobSeeker getting the axe earlier than expected?

author-avatar By on May 11, 2020
Are JobKeeper and JobSeeker getting the axe earlier than expected?

Photo by Joshua Rodriguez on Unsplash

It was widely reported that JobKeeper and boosted JobSeeker payments might not last the full six months, after statements the Government made on Friday.

THE LATEST: JobSeeker will reportedly get a permanent increase.

Previously, JobKeeper payments for childcare workers were announced to end on 20 July, while the nation's free childcare program will also be wound up on 12 July.

A transition payment of 25% of fee revenue will continue to flow to centres from 13 July to 27 September. It's currently at 50%. 

It's rumoured other sectors could follow.

Below last updated 11 May...

In a press conference on Friday, Prime Minister Scott Morrison was bearish about the longevity of JobKeeper and JobSeeker.

“I can give them the certainty that I want them to be back in their jobs, where they don't need it [JobKeeper or JobSeeker],” he said.

“That's what we want. I mean, people don't want to be on JobKeeper and JobSeeker. They want to be in a job that's paying them.

“And that's what this plan is about - not to keep people on income support from the taxpayer, but to have a wage that's provided by a business that's successful and earning again and going forward and creating a strong economy.”

JobKeeper is officially slated to begin payment from 4 to 14 May, meaning some businesses have had to wait after experiencing the initial shock of lockdowns announced on 22 March.

JobKeeper is due to run until 27 September, however the Government recently announced a three-stage plan allowing for pubs, clubs and cafes to reopen in June.

All JobKeeper payments are backdated to March provided the employers applying are eligible and have completed the two step process - register their intent with the tax office, and have reported their April income and projected their May income.

For JobSeeker, legislation ends 24 September - five months after payment dates started on 27 April.

This means that certain groups who receive payments from 11 May could receive one less payment than other groups.

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The Australian Council of Social Services (ACOSS) has warned against the Government's wind-up date on boosted JobSeeker payments.

“People cannot afford these huge cuts to income support, proposed by the Government, which would take us back to the old, brutal rate of Newstart at just $40 a day," ACOSS chief Cassandra Goldie said.

"The Government must keep the new JobSeeker Payment in place until our income support system is fixed so that nobody is forced to live below the poverty line.

"The poverty line in Australia, as defined by the OECD, is $500 per week for a single person with no children."

So, what's in store for JobKeeper and JobSeeker?

JobKeeper payments are backdated to March when the lockdowns began, giving the full six months to September like the Government legislated.

If the economy is ticking along, coronavirus is shown the door, and places reopen in June, then JobKeeper - a $130 billion hit to the budget - may well naturally come under the microscope, with Prime Minister Scott Morrison saying there will be a review into JobKeeper at the end of June.

“I need to stress again that was a temporary lifeline put in place to help Australians through the worst of this crisis,” he told reporters in Canberra on Friday.

“It comes at a very significant cost.”

Similarly, the continuity of boosted levels of JobSeeker payments is also in doubt.

At the individual level, it could be incredibly hard to give-up the boosted payments of $1,100 per fortnight, and organisations such as ACOSS are lobbying hard for a permanent boost.

JobSeeker may not return to the '$40 a day' level, however continuing at $1,100 a fortnight post-September looks unlikely.


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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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