The Federal Government today revealed it will extend the JobKeeper and JobSeeker subsidies until March 2021.
But at the end of September 2020, full-time workers will receive instead, a reduced payment of $1,200 and part-time workers who work less than 20 hours a week, will receive a reduced amount of $750 a fortnight.
Prime Minister Scott Morrison also announced that at the end of December, the figure will be revised down to $1,000 for full time workers and $650 for part-time workers.
Also, the JobSeeker coronavirus supplement will be reduced at the end of September meaning those without a job, will have their payments cut back to about $800 a fortnight until the end of the year under the employment scheme.
Previous to coronavirus, the JobSeeker, formerly known as Newstart, worked out to pay those looking for work around $560 a fortnight. This was increased to $1,100 with a $550 supplement payment that was due to end in September, alongside the wage subsidy scheme.
“We made the conscious decision to have a flat rate payment [when introducing JobKeeper] because we understood at that time that people were losing second and third jobs,” said Mr Morrison.
“Ensuring we had one flat payment across the entire labour force ensured that we were protecting our social security system and you will also remember the great strains that that system was under early during the crisis.”
He said now, there is capacity to have a two-tiered system of payments.
A review, done by the Treasury, found there is a strong case to extend JobKeeper past September to help businesses and workers hit hard by the shutdowns. Around 3.5 million workers are supported by the subsidies.
The Prime Minister also revealed that businesses with a turnover of up to $1 billion are required to show a 30 per cent drop, while those with more than $1 billion have to show a 50 per cent decline to be eligible for a renewed eligibility test of turnover in October.
The JobSeeker coronavirus supplement will also be reduced to $250 for the last quarter of the year, but the government is also increasing the income-free threshold for those on the dole to $300.
“In the second phase, which will be at the end of September, we will be moving to a higher rate of job search,” Mr Morrison said.
“We’ll be reintroducing the assets test for eligibility for those payments and we’ll be reintroducing assets waiting period at that time.”
From August 4, the government will be requiring those who are on the dole to connect with employment services and also search for jobs at least four times a month. And penalties will kick in for those who refuse a role.
“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,” Mr Morrison said.
At the end of September there will be a higher rate of job search required and the reintroduction of the assets test for those payments. Sole traders will not face the same level of tests.
Partner income test thresholds will remain in place as will the ordinary waiting period waiver.
He said the government expects they will “likely” need to continue these supplements after December, but this would be decided later in the year.
“It is our intention that we would expect that there would be likely a need to continue those supplements post-December, but there is a difference between JobKeeper and JobSeeker,” Mr Morrison said.