More than 2 million Aussies to lose JobKeeper payments from next week
JobKeeper 2.0 starts on September 28 and there are some big changes to who will receive it and who won't this time around.
About 2.1 million of the 3.5 million Australians currently receiving JobKeeper are expected to be ineligible for the payments after stricter criteria are introduced next week.
The Government announced in July that JobKeeper would be extended for six months until March 28, 2021, but with significant changes.
Businesses which apply for the payment will need to show actual turnover declines in the September quarter. Businesses with an aggregated turnover of less than $1 billion will need to demonstrate a 30% decline, while businesses with aggregated turnover of $1 billion or more will need to show their turnover has halved.
Charities and not-for-profit groups which continue to be significantly impacted by COVID-19 will need to demonstrate a 15% decline in turnover.
JobKeeper will be open to new recipients, provided they meet the eligibility requirements and the turnover tests that apply during the relevant JobKeeper payment period.
Aside from the new rules that affect businesses, the amount of the payment will be decreased over two stages.
From September 28, 2020, to January 3, 2021, the payment rate will be $1200 per fortnight for employees who, in the four weekly pay periods before the reference period, were working in the business for 20 hours or more a week on average and for business participants who were actively engaged in the business for more than 20 hours per week.
For anyone who worked in the business less than 20 hours a week on average would earn $750 per fortnight.
The rates will be decreased further from January 4, 2021, to March 28, 2021. The payment rate will drop to $1000 a fortnight for eligible people working for 20 hours or more a week on average and for business participants who were actively engaged in the business for more than 20 hours per week.
Those working less than 20 hours per week will receive $650 per fortnight.
For those who can no longer access JobKeeper, JobSeeker will still be available but it too will be cut from late September, when the basic payment for an unemployed person will drop from $1115.70 a fortnight to $815.70.
However, the new changes will allow those on JobSeeker to earn up to $300 a fortnight before their income support is tapered off. Previously you could only earn a maximum of $106 before income support was reduced.
An ABS survey from June 2020 found that, of around 1000 individuals currently receiving JobKeeper, about half were receiving less income than their usual pay, one-third were receiving about the same and one in five were receiving more.
MyState Bank surveyed 1000 Australians found almost four in 10 people had no emergency fund at the outbreak of Covid-19 while one-third were forced to dip into savings during this period.
Almost a quarter of those needing to access their savings reported those savings were originally earmarked for first home deposit.
According to the MyState Bank research, paying for essentials such as groceries (39%) and household bills (39%) are the biggest reasons for dipping into savings at this time.
MyState Bank general manager Heather McGovern says the research also showed that half those surveyed say they would not be able to afford a $200 increase in monthly household expenses.
More than 40% expected their finances to continue to be affected by COVID-19 over the next six to 12 months.
To help keep on top of money at this time, McGovern provided these tips:
- Scrutinise spending. Working from home has changed discretionary spending - ensure all non-negotiable expenses are paid first then you can make better decisions on discretionary purchases.
- Leverage the power of digital. The StateBank app uses customer data to keep them up to date on their spending, upcoming expenses, how much they can afford to save and even move money to savings.
- Review unused subscriptions. This might include excess viewing subscriptions and gym memberships that you have stopped using.
- Use tax refunds wisely. Use the windfall to pay down any debts that might be charging you high rates of interest like your credit card.
- Shop around to find the best deals. Loyalty doesn't always pay with providers often reserving their best deals for new customers.
- Make it a habit. Resolve to set some time aside in your calendar every quarter to take a thorough look at your finances.
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