Industry Overview: Keeping Up with Job Supplements

Business, Journal,  Principals

The JobKeeper and JobSeeker Payment schemes, temporary subsidies available to real estate businesses and individuals significantly affected by coronavirus (COVID-19) are set for a major shake-up from 1 October. There has been much confusion over eligibility for both payments and for which one you may qualify. The REIQ provides a timely recap…

Key Points:

  • On 21 July the Federal Government announced proposed changes to JobKeeper including an extension through to 28 March, 2021 (these changes don’t impact JobKeeper payments until after 28 September 2020).
  • You can enrol for the JobKeeper Payment at any time until the program closes if your circumstances have changed (check if you are eligible at Enrol for JobKeeper).
  • The ATO has compliance activities underway to ensure JobKeeper payments are reaching eligible employers (see Keeping JobKeeper payment fair).

Millions of COVID-affected Australians will continue to receive JobKeeper and JobSeeker beyond the Federal Government’s original planned finish date of 30 September 2020 as part of an extra $20 billion in government stimulus. Prime Minister Scott Morrison announced last week that both support measures would be extended to continue helping households and businesses recover from the coronavirus recession. However, both payments will be dramatically reduced with businesses required to meet new turnover tests and JobKeeper split into two tiers for full-time and part-time workers respectively.

JobSeeker

In mid-March 2020, the federal government doubled the unemployment benefit (JobSeeker) when it introduced a temporary coronavirus supplement of $550 per fortnight. The temporary supplement was paid on top of the base JobSeeker rate, which is equal to $565.70 a fortnight for someone without children, and $612 a fortnight for someone with children. These arrangements and eligibility requirements will remain in place until 25 September 2020, when the fortnightly coronavirus supplement will drop from to $250 – where it will stay until at least 31 December 2020  and which will  include the energy supplement but excludes rent assistance. The future of the supplement beyond December remains undecided, with the Prime Minister explaining: “We would anticipate there would need to be some continuation of the COVID Supplement payment post-December.”

One of the other major changes to JobKeeper is it will be split into two tiers, one for full-time and one for part-time workers. So, if you were working fewer than 20 hours a week in February this year (or “pre-COVID”), your payment will drop from $1,500 to $750 a fortnight after September. At the beginning of 2021 it will be reduced again to $650 a fortnight. The Prime Minister says the payments are being changed now because the Federal Government’s systems were not equipped to deal with the “two-tier” system at the beginning of the pandemic.

In addition to adjusting the supplement, the Federal Government has modified the income taper test, reintroduced means testing, reduced waiting times and brought back job-seeking requirements. The Federal Government has also increased the income-free area as an incentive for more people to seek employment opportunities. The income-free areas have increased from $106 a fortnight to $300 for JobSeeker recipients and from $143 a fortnight to $300 for Youth Allowance recipients. This means people can earn up to $300 a fortnight and still receive the maximum rate of either supplement.

In addition, the government is changing its taper rates. Previously, JobSeeker recipients lost 50 cents in income support for every dollar they earned between $106 and $256 per fortnight – and 60 cents for every dollar they earned above $256 per fortnight. Meanwhile, Youth Allowance recipients lost 50 cents for every dollar they earned between $143 and $250 per fortnight, and 60 cents for every dollar earned above $250 per fortnight. From 25 September 2020, these tests will be replaced with a single income test of 60 cents for every dollar of income earned above $300 per fortnight – for recipients of both supplements. The only exclusion is if you’re a principal carer parent where the old income test of 40 cents for every dollar of income earned above $106 a fortnight will continue to apply.

Importantly, the coronavirus supplement will continue to be excluded from JobSeeker income tests, which means anyone eligible for the supplement will still receive the full amount ($250 as of 25 September 2020). What’s more, the amount your partner/de facto can earn without it affecting your JobSeeker payments will increase on the same date. Currently recipients lose 25 cents in income support for every dollar their partner or de facto earns above $996 a fortnight. From 25 September 2020, that will change to 27 cents for every dollar they earn above $1,165 a fortnight.

Meanwhile, the Federal Government will reintroduce former assets test rates (click here for current rates – these will be updated by Services Australia in due course) for JobSeeker post 25 September 2020 for both new and existing recipients. And the Liquid Assets Waiting Period will also be reinstated for all payments, meaning those with more money in the bank will have to wait for longer to receive them. However, the Ordinary Waiting PeriodNewly Arrived Resident’s Waiting Period, and the Seasonal Work Preclusion Period will continue to be waived until 31 December 2020.

If you’re a sole trader, permanent employee who has been stood down, a casual employee (under 12 months), contract or commission-based worker or self-employed, provided you meet the income and assets tests, you will continue to qualify for JobSeeker and receive the payments until at least 31 December 2020. However, from 4 August 2020 any JobSeeker recipients must connect/reconnect with a job service provider, agree to a jobs plan, undertake a minimum of four job searches a month, and participate in training or other activities if it safe to do so in order to continue receiving the supplement. Please note, the Federal Government will penalise you for refusing a job if you are offered one – unless you can provide a reasonable excuse. For further detail, click here.

JobKeeper

For real estate agencies who have already registered for JobKeeper, it will be extended until 28 March, 2021, but the rate will also be cut. This is a result of Treasury discovering approximately a quarter of recipients have been paid more via JobKeeper than they earned previously in their actual job – netting an average pay rise of $550 a fortnight each. As a result, the Federal Government is introducing a tiered payment system.

The current rate of $1,500 a fortnight will be maintained for all eligible employees (roughly 3.5 million people) until 27 September 2020 after which and up until 31 December 2020, it will be reduced to $1,200 a fortnight for full-time workers and $750 a fortnight for part-time workers. From 4 January until 28 March 28, 2021, it will drop to $1,000 a fortnight for full-time workers and $650 a fortnight for part-time workers. Under JobKeeper, full-time workers are defined as employees who worked an average of more than 20 hours a week (in February 2020) while part-time workers are defined as employees who worked an average of less than 20 hours a week.

Real Estate Agencies: What’s your lost turnover…again?

As employers, to continue qualifying for JobKeeper supplements, real estate agencies will have to prove they’ve lost turnover yet again (if you previously signed up to JobKeeper). And the new test for whether or not you’re still experiencing hardship is set to become more stringent. The tests of at least a 30%/50% reduction in turnover will remain (based on turnover), but reapplied at the end of September and then again at the start of January. That means any agency with an aggregate turnover of $1 billion or less currently will have to prove a 30% fall in turnover while those with a turnover of greater than $1 billion need to show a 50% fall to qualify. In addition, agencies will also have to prove they’ve experienced the relevant decline in turnover in all previous quarters to receive the payment. For example, if you’re applying for JobKeeper for the first three months of next year, you’ll be required to prove you lost income in the June, September and December quarters.

Refresher: Are you are an eligible employee for JobKeeper?

To receive JobKeeper, you’re eligible for the coronavirus supplement payment if you:

  • Are currently employed by the eligible employer (including if you were stood down or re-hired);
  • were for the eligible employer (or another entity in their wholly owned group), either a:
  • full-time, part-time or fixed-term employees at 1 March 2020;
  • long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020 and not a permanent employee of any other employer;
  • were aged 18 years or older at 1 March 2020 (if you were 16 or 17 you can also qualify for fortnights before 11 May 2020, and continue to qualify after that if you are independent or not undertaking full time study);
  • were an Australian resident (within the meaning of the Social Security Act) – visit the Services Australia website and read residence descriptionsfor more details; or,
  • were an Australian resident for the purpose of the Income Tax Assessment Act and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020.

Furthermore, you cannot be in receipt of any government parental leave or Dad and partner pay under the Paid Parental Leave Act, any payment in accordance with Australian worker compensation law for an individual’s total incapacity for work, or have started work with your current employer after 1 March 2020. If you answer yes to any of these, your employer will not be eligible to claim the JobKeeper payment on your behalf.

If you aren’t eligible to be paid JobKeeper payments by your employer, you may be able to apply for support through Services Australia depending on your personal circumstances.

Did you miss our Jobkeeper Facebook Live webinar with businessDEPOT’s John Knight? Watch the replay here

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