Jobkeeper and Jobseeker should have been called different names, the similarities between them have made it confusing to many people. Simply put, Jobkeeper is for people that are employed. Jobseeker is for people seeking employment. Before we discuss the differences, see below a few key points:
- Jobkeeper administered by employers and the ATO
- Jobseeker administered by Department of Human Services (Centrelink)
- Jobkeeper is currently $1,500 before tax per fortnight (reducing to a maximum of $1,200 and $1,000 in coming months
- Base Jobseeker is $565.70 per fortnight
- Jobseeker currently has an additional payment of $550 per fortnight due to Covid-19, called the Coronavirus Supplement
- Coronavirus supplement of $550 per fortnight reducing to $250 per fortnight from the 24th September 2020
- Coronavirus Supplement also applies to Partner/Widow/Youth/Abstudy/Farm Household Allowances, and also to Austudy, the Parenting Payment and the Special Benefit payment
What does it all mean?
The key facts to take out of this list is that the Coronavirus Supplement (currently $550) is set to reduce to $250 per fortnight on the 24th of September 2020, and that this reduction will affect current recipients of Jobseeker and the other allowances mentioned above. After this, the supplement will be eliminated on the 31st of December. A current Jobseeker recipient receives $1,115.70 per fortnight under the scheme, whereas in a few days, that same individual will receive only $815.70 under the scheme. Note, they may actually be receiving more than this due to entitlement to other funding (eg. Rental assistance etc.). After December, they will only receive the base Jobseeker rate of $565.70 per fortnight. All queries, applications and payments are to be administered by Centrelink.
Jobkeeper is following a similar path, it too is being reduced by $300 per fortnight in the coming week. Unlike the Coronavirus Supplement mentioned above however, it will continue into the new year and is currently legislated to finish on the 28th of March 2021. This payment is applied for by the employer (if eligible). After this application and testing, they will nominate eligible employees based on their employment status and length of tenure, and then make payments accordingly. The month after these payments are made, the ATO will reimburse up to $1,500 per fortnight (currently, due to decrease 28th September 2020). Employers must pay the full amount to the employee as a minimum to be entitled to the Jobkeeper reimbursement. If the employee works over and above, they are paid their regular wage, if they work under the hours that would equal $1,500 a fortnight, they are still paid $1,500 per fortnight. This will operate in the same way in coming months but at a lower payment rate (specifics in our upcoming post on Jobkeeper 2.0).
Accountants typically provide advice to businesses in these circumstances; however a good accountant should be able to inform you of the Centrelink payments currently being offered, and what they mean to you. Feel free at any point to send us an enquiry, we will be able to help.