JobKeeper payment – some key facts & figures
The end of the month is fast approaching, causing emotional stress among an estimated 100,000 to 150,000 people. I am actually quite familiar with this as my partner works in one of the industries that has been hit hard by the pandemic and which is not expected to recover for some years (He teaches English to international students at a university).
Federal Treasury forecasts that between 100,000 and 150,000 JobKeeper recipients currently working zero or minimal hours will become unemployed when the 12-month wage subsidy expires. That equates to about 1 per cent of the 13 million people in jobs last month. The $93b JobKeeper scheme was introduced in March last year in response to business shutdowns ordered by governments in response to the COVID-19 virus. It was originally due to run for six months, before the federal government extended it for a further six months. This significantly supported the employment rate in Australia during the pandemic. At its peak, a staggering 3.8m people were on JobKeeper, with this number falling over time to now stand at an estimated 1.1m.
The unemployment rate fell to 5.8% in February from 6.3%. While the end of JobKeeper payments may potentially slow the recovery temporarily, it is widely believed that the labour market will be able to absorb the projected rise in unemployment.
How can I ease the transition if I find myself in this situation?
1. Draw up a budget
Go through your expenses. As simple as it may sound, this is what you need to do in any case to identify what fixed expenses you have to pay. This can be your mortgage or rent payments, regular bills and groceries. There is no way to avoid it – you must have an awareness of how much your basic needs cost.
2. Work out what your entitlements are
Speak with your HR manager or go through your payslips to see what your leave entitlements for leave such as annual leave and long service leave are and also what redundancy payment you are entitled to
3. Are you entitled to JobSeeker payments?
You may be eligible for financial help if you’re between 22 and Age Pension age. Be mindful of conditions such as the Liquid Asset Waiting Period (LAWP) and Income Maintenance Period. The LAWP is up to a maximum of 13 weeks prior to receiving an initial payment. It applies to new applicants that have liquid assets equal to or greater than:
▪ $5,500 for singles with no dependents, or
▪ $11,000 for couples or singles with a dependent child.
The basis for applying the LAWP is for applicants to draw on those assets before receiving income support payments. Examples of liquid assets include bank accounts, loans to other people, gifts, shares and investments.
The Income Maintenance Period (IMP) arises when you cease employment and apply for certain income support payments. During this period, lump sum termination or leave payments received after ceasing employment are treated as ordinary income and may delay eligibility to receive the first payment or reduce the payment amount. Examples of payments which come under this condition include redundancy payout, annual leave, long service leave, unpaid sick leave and any other termination payment you may be eligible for.
JobSeeker recipients will stop receiving the Coronavirus Supplement after 31 March 2021. Currently, the Coronavirus Supplement of $150 per fortnight is paid in addition to JobSeeker Payment entitlements.
Other temporary changes that will also cease after 31 March 2021 include:
- the increased income free area for the income test (currently $300 pf, with a new threshold of $150 pf announced)
- the reduced partner income taper rate (currently 27%, reverting back to 60%), and
- expanded eligibility criteria to allow access to JobSeeker for certain individuals impacted by COVID-19 (ie those who became unemployed, had reduced working hours and self-employed or sole traders with reduced business income).
4. Get some financial advice or counselling
There is quite a lot of support available out there if you need to reach out to someone.
Financial advisers can help you with your budget and restructure your debt etc. Further information can be found on moneysmart.gov.au, including the contact details of the support organisations out there.
If you would like to learn more information please call 07 33789681 and/or feel free to book a no obligation, free meeting with us to discuss your circumstances and find out how we can assist you.