JobKeeper, JobSeeker supplement to continue but payments cut

The Federal Government has confirmed it will extend the JobKeeper program until at least the end of March but at a reduced rate.

The JobSeeker supplement will also be reduced while mutual obligations for unemployed people will be reintroduced from next month.

A review of the JobKeeper wage subsidy has found it has helped reduce job losses and the closure of businesses across the country, but has recommended it should continue.


The program has already cost over $30 billion, supporting almost a million businesses and around 3.5 million workers.

Prime Minister Scott Morrison says the situation in Victoria shows we are a long way from being out of the woods.

“It’s been apparent to us for some time that there will be businesses who will continue to be affected heavily by those restrictions and as a result they’ll be in a position to continue to get access to JobKeeper
going forward,” Mr Morrison said.

JobKeeper 2.0

Jobkeeper will be reduced to $1200 per fortnight from the end of September and will be further reduced to $1000 from January.

There will also be a lower payment for people working less than 20 hours a week, with those people to receive $750 a fortnight from the end of September, reduced to $650 from January.

Businesses will have the 30 per cent turnover reduction test applied at the end of the September quarter and the end of the December quarter to ensure their eligibility.

Mr Morrison says JobKeeper has done its job but now needs to be more responsive to the current circumstances.

“It has been effective in stemming the loss of business closures and job losses, that it has saved businesses and it has saved livelihoods. That is the feedback that I have been getting direct as I have spoken to Australians, employees, employers, all around the country.

“It has been the game-changer for them. Their businesses would not be here, their jobs would not be there were it not for the intervention and the way it was undertaken so quickly and so effectively.”

The continuation of JobKeeper is expected to cost taxpayers an extra $16 billion.

Treasurer Josh Frydenberg says they expect the number of employees eligible for the subsidy to fall to around 1.4 million in the December quarter and 1 million in the March quarter.

“We know that the economic pain caused by COVID will end and that many businesses now struggling will be viable once again, this is why we’re extending the payment to buy time to get businesses and employees to the other side,” Mr Frydenberg said.

“JobKeeper is the largest single economic measure any Government in Australia’s history has undertaken. It’s come at an extremely difficult time, but the Australian public know that the Morrison Government has their backs.”

JobSeeker Supplement slashed

The JobSeeker supplement will be reduced to $250 per fortnight from the end of September until the end of the year.

An announcement is expected later in the year about whether we will see a permanent increase to the benefit beyond December.

But the Prime Minister has already signalled some kind of supplement will continue after that.

“We need to make those decisions closer to the time to have a better understanding of where the economy is at remembering the JobSeeker arrangements has more an impact on incentives on the labour market.

“We want to be in a position to better assess where the situation is closer to the end of the year. We have always said that the JobKeeper and the JobSeeker COVID supplement were temporary measures.

“I want to be very clear, I am leaning heavily in to the notion that we would anticipate on what we know right now that there obviously would need to be some continuation of the COVID supplement post-December.”

Those on JobSeeker will now be allowed to earn up top $300 before their payments are affected.

Mutual obligations will be reintroduced from August 4, requiring those on JobSeeker to resume actively looking for work.

They will be required to undertake at least four job searches a month, with that rate to be increase after September.

Penalties for those who refuse a job will also resume.

Mr Morrison says most Australians understand that the elevated JobSeeker payment cannot continue forever.

“It was introduced at those very highly elevated levels because of the severe economic situations that were in place and the fact that there were no other jobs at all out there for people during those times.

“We wanted to boost that level of income support both for the economy, but also obviously to reduce hardship for individuals themselves, and so it has always been our view that it has to taper back.

“It has to scale down and work ourselves off these supports because they’re not enduring, they cannot be permanent, they were never designed to be permanent.”