New dole loophole allows double-dipping
Part-time workers on the new $750 JobKeeper will earn less than the new unemployment payment which is worth $815-a-fortnight under the revamped scheme announced by the Morrison Government.
But workers forced onto the dole queues by COVID-19 shutdowns will now be able to claim both JobKeeper and Jobseeker in some circumstances earning up to $1300 a fortnight if they work part-time under the revamped scheme.
That's also more than the full-time rate of JobKeeper which $1200, although your employer would be topping up the base rate in wages.
The changes being made to the Jobseeker payment are designed to improve incentives for individuals to re-enter the workforce or take on additional work as the economy recovers but have raised questions over whether some workers will be better off on unemployment benefits.
But will workers want to work part-time on JobKeeper if they can earn more tax-free on Jobseeker?
In theory, you can earn $815 a fortnight tax-free on the dole from October or $750-a-fortnight before tax under JobKeeper if you're working 20 hours a week or less.
Will that mean working isn't worth it for some workers? Asked whether this was "counterintuitive" on Tuesday, Prime Minister Scott Morrison was adamant it wouldn't act as a disincentive to find work.
"What you're assuming is that no-one is doing any work. That's not an assumption you can make, and it is certainly not an assumption that the Treasury has made,'' Mr Morrison said.
"Treasury has made the point that on JobKeeper, for example, those businesses that may still require it, they will be making payments in addition to JobKeeper to staff doing additional hours. This is why it's so important that the industrial relations side of all of this is also brought into focus.
"These payments have given enormous support to people when they've needed it most. But the industrial relations flexibility that has been afforded to employers has also enabled those employers to keep people in jobs.
"I don't want to see people lose jobs post-September because of an industrial relations system which is so inflexible that it says to one person, 'I have to employ you full-time', and says to the other, 'so I'll have to sack you'.
"But that's the circumstances we are looking at in what will be a very challenged economy post September."
While the option of claiming both payments was always there under the old system, the flat-rate of $1500 a fortnight under the JobKeeper scheme meant that anyone securing it was earning too much to qualify for unemployment benefits.
That's not the case under the new arrangements because a new part-time rate of JobKeeper will apply from October that is worth $750 a fortnight. The full-time rate will be $1200 which is a reduction on the original rate of $1500.
While still tough to survive on and pay rent, the changes are far more generous than the original JobKeeper payment which was just $550 a fortnight before the coronavirus pandemic hit Australia.
The JobKeeper payment is a wage subsidy paid directly to employers, not to workers but until now claiming from both schemes hasn't been a real option.
#JobKeeper will be extended by six months to the end of March next year and the temporary supplement for those on income support will also be extended until the end of the year, we’ve just announced #auspol #breaking pic.twitter.com/QfA4lLte0Y— Scott Morrison (@ScottMorrisonMP) July 21, 2020
At the same time, the Morrison Government has also increased the amount you can earn without losing a cent of Jobseeker to $300 a fortnight with a taper rate reducing welfare payments if you earn more.
The changes mean that even though the doubled dole payments of $1100 a week will be slashed to $815 a fortnight, some workers will be able to secure more cash, if they can find some part-time work to supplement their income.
"For Jobseeker, we're increasing the income-free area that is available to those who are on Jobseeker to $300,'' Mr Morrison said on Tuesday.
"That means you can earn $300 without it affecting any of your Jobseeker payments. We're adjusting the COVID supplement down to $250. So that means you can earn $300 where you may have been getting $550 before, you can earn $300 and then there's the $250 supplement that will come through the COVID Supplement and that will run out till the end of this year."
But the Government is planning to reintroduce mutual obligation in two phases, from August 4 when job seekers will be required to connect again to employment services and to undertake four job searches a month.
"So if there is a job to be taken and a job that is being offered, then it is an obligation, a mutual obligation, for those who are on Jobseeker to take those jobs where they're on offer. This is important as we move through the next phase,'' the PM said.
"We'll be reintroducing the assets test for eligibility for those payments and we'll be reintroducing liquid assets waiting period at that time. We will be maintaining the eased restrictions around sole traders for their eligibility for Jobseeker. We will be retaining that support for people to access it who are part-time and casual."
Parents get an even better deal. A lower income taper rate of 40 cents in the dollar for earnings over $300 continues to apply for Jobseeker payment recipients who are principal carer parents.
Govt has continued to fail to provide any support for all those who missed out on #jobkeeper because they are in casual or irregular work or are in sectors such as the arts or universities— Anthony Albanese (@AlboMP) July 21, 2020
If you are a business and want information about the new JobKeeper turnover test you can find it here.
If you are a worker and want to know more about the new rates of JobKeeper for full-time and part-time workers you can find it here.
Originally published as New dole loophole allows double-dipping