Insight,

Federal Budget 2020-21: JobKeeper & JobSeeker

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No major changes were highlighted to the JobKeeper or JobSeeker programs, other than changes to the mutual obligation requirements for JobSeeker.  Both programs will be reviewed on an ongoing basis.

JobKeeper

No new amendments to the JobKeeper program were announced in the Budget, with the Government expected to review the program on an ongoing basis (especially closer to its 28 March 2021 end date).

Overall, the JobKeeper program is now estimated to cost $101.3 billion over the forward estimates period, $15.6 billion more than was reported in the July 2020 Economic and Fiscal Update.  This is due to:

  • changing the employment reference date for assessing an employee's eligibility for the JobKeeper Payment from 1 March 2020 to 1 July 2020, with effect from 3 August 2020; and
  • extending the JobKeeper program until 28 March 2021.

JobSeeker

In April 2020, the Government established a new time-limited Coronavirus Supplement to be paid at a non-income tested rate of $550 per fortnight.  This is paid to both existing and new recipients of JobSeeker Payment, Youth Allowance, Parenting Payment, Austudy, ABSTUDY Living Allowance, Farm Household Allowance, Special Benefit, and recipients of the Department of Veterans' Affairs Education Schemes, Military Rehabilitation and Compensation Act Education and Training Scheme and Veterans' Children's Education Scheme.

As was previously announced, from 25 September 2020 this supplement changed to $250 per fortnight and will continue to 31 December 2020.  The income free area will change to $300 per fortnight with a 60 cents taper for income earned above the income free area for JobSeeker Payment (except principal carer parents who have an income free area of $106 and a taper rate of 40 cents) and Youth Allowance (other) recipients.

Payment eligibility for the above programs has been relaxed on a temporary basis in response to the COVID-19 pandemic.  However, from 25 September 2020, the following will change:

  • the Assets test and Liquid Assets Waiting Period will be reinstated; and
  • the partner income test taper will be further revised to 27 cents in the dollar above the partner income free area of $1,165 per fortnight (through to 31 December 2020).

Mutual obligation requirements were temporarily lifted on 24 March 2020 and then gradually reinstated from 9 June 2020 in line with the gradual removal of COVID-19 restrictions (apart from Victorian residents).  Mutual obligations will be changed to give job seekers greater flexibility to count education and training toward their activity requirements.

The Government has previously indicated that it will review these measures on an ongoing basis through the COVID-19 pandemic and make necessary changes in response to situations that arise, as occurred in relation to the second wave in Victoria.

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