It’s D-day for the million Australians receiving JobKeeper with COVID relief payments finishing this week.
Figures from the ATO show one million people were receiving JobKeeper at the end of January, down from 3.6 million in September last year when the payments were first slated to finish.
As a result of JobKeeper ending, Treasury estimates up to 150,000 people could find themselves unemployed.
For many, this will mean transitioning to JobSeeker while they look for work, which from Wednesday for a single person is up to $620.80 a fortnight – if they meet income and asset tests. For many households where a partner is still on a full salary, they might not qualify at all.
Other payment support programs include the Family Tax Benefit and the Child Care Subsidy.
RateCity.com.au research director, Sally Tindall, said: “For months, we’ve been talking about the impending JobKeeper cliff. Today, hundreds of thousands of Australians are now facing it head on.”
“The cliff isn’t nearly as big as it would have been back in September, but for up to 150,000 people who are set to lose their jobs, it’s going to be a difficult landing,” she said.
“Many people have only just managed to scrape by over the last year on JobKeeper payments. Now they could find the bills impossible to pay,” she said.
Most mortgage repayment pauses offered by the banks are finishing this Wednesday, after this time credit reporting will return to normal.
“Just because the banks’ COVID mortgage deferral programs are finishing, doesn’t mean your lender will stop offering support,” she said.
“If you don’t think you can make your monthly repayments, pick up the phone and tell your lender before it’s due. They don’t want to see you default any more than you do.
“When you talk to your bank, ask to be put on the new customer rate. If you haven’t negotiated your loan in a while, that might be enough of a discount to get you through,” she said.
RateCity.com.au research shows a 0.50 per cent cut on a $500,000, 30-year loan would drop a person’s monthly repayments by around $130.
Options for people under financial pressure
Get personal financial advice: sitting down with a trusted accountant or ringing the National Debt Helpline can help you come up with a plan to get through.
Use any money you have saved wisely: whether that’s from a redundancy package or a rainy-day fund, come up with a plan that will see it last as long as possible.
Check what government assistance you are eligible for: the level of assistance will depend on your income, assets and living circumstances.
If you have a home loan ask for a rate cut: another alternative is to switch to interest-only payments, but make sure your bank doesn’t hike your rate. If you are in hardship, the last thing you need is to pay more interest.
Negotiate your bills: call your energy, gas, phone and internet providers and ask them for a better deal, or a reprieve if you need one. If you’re struggling to pay for essential items, you could also be eligible for a no interest loan.
Make your own budget cuts: sit down with your bank statements and see where you can make cutbacks – that could be putting the gym membership on pause, cancelling Netflix or Stan subscriptions, or eating in as much as possible.
Where to get help if you are experiencing financial hardship
The National Debt Helpline: 1800 007 007, ndh.org.au (operates Monday to Friday).
The helpline can put you in touch with a financial counsellor who can talk you through your options.
No Interest Loan Scheme (NILS) nils.com.au
The scheme offers interest free loans of between $300 and $1,500 for essential goods and services such as fridges, washing machines, car repairs and medical procedures for people who earn under $45,000 after tax or have a health care or pension card.
For people going through severe financial hardship, charities can often help with food and shelter, Centrelink has crisis payments. Support hotlines such as Beyond Blue and Lifeline can help you manage the stress financial hardship brings.