The first decrease in the government social security payment keeping more than a million people financially afloat during the COVID-19 pandemic drops by $300 today, while the other keeping millions more in work tapers too.
The welfare subsidies were introduced after 932,000 people lost their job in the March to June quarters, according to the Australian Bureau of Statistics (ABS) leading to $55 billion being spent in welfare payments and stimulus initiatives.
What’s changing in JobSeeker
The JobSeeker coronavirus supplement peppering the social security payments of 1.45 million people drops by $300 per fortnight today. It’s the first scheduled decrease in the supplementary payment to the unemployment benefit.
The fortnightly payments going forward will be:
- Single: $815.70
- Single, with a dependent child or children: $862
- Single, 60 or older, after 9 continuous months on payment: $862
- Partnered: $760.80
- Single principal carer: $1043.10
The remaining $250 fortnightly coronavirus supplement built into these payments is calculated to cost the government $3.8 billion.
Among the new changes is the ability for recipients to earn up to $300 a fortnight -- basically, the amount of the reduction -- without forgoing the payment or affecting their eligibility for the coronavirus supplement.
However, the previously waived testing criteria is being reintroduced. These include the assets test and the liquid assets waiting period, while the partner income test will have its criteria tightened.
JobSeeker is technically due to expire on 31 December 2020, but an update on its fate is expected to be provided during the unveiling of the Federal Budget on October 6.
What’s changing to JobKeeper?
The government payment subsidising the continual employment of 3.5 million Australians will drop by $300 a fortnight on 28 September in the first of two decreases.
JobKeeper payments will drop from $1500 to $1200 a fortnight for full time employees, while those working less than 20 hours a fortnight will receive payments of $750.
The payments are scheduled to drop again on 3 January 2021. The full time rate will drop to $1000 a fortnight, while the ‘part-time’ rate will reduce to $650, before the subsidy expires altogether on 28 March.
JobKeeper represents the largest employment subsidy in the federal government’s $55 billion coronavirus aid package, the ABS said, costing taxpayers an estimated $31 billion.
Trim the fat and spend less
A number of seemingly small actions could help lower your financial footprint during this extraordinary time. Shopping smart and being disciplined can pay off.
- If you have a mortgage: Consider calling your bank and asking to go on the new customer interest rate. The RBA says existing customers are on an average rate of 3.22 per cent; yet the big four banks now have variable rates starting at 2.69 per cent. On a $500,000 loan your monthly repayment would drop by about $140 a month, according to a RateCity analysis.
- If you are renting: Be honest with your landlord and consider asking for a rent reduction – currently rents are dropping across much of the country – so your landlord may be happy to reduce your rent to keep you.
- Reviewing bank and credit card statements: Scanning your statements provides a black-and-white look at your cash flow. Forgotten subscriptions and indulgent purchases can be spotted here -- as can any mistakes made by your financial institution or bill providers.
- Shop second hand: Not only is it more sustainable, but buying second hand clothes may help save a lot of money. Most schools have second hand uniform shops, while second hand marketplaces like Gumtree or facebook could have some promising used toys.
- Sell what you don’t need: A helpful way to get hard cash quick is by selling unwanted stuff. A recent Gumtree report found the average Aussie hopes to make $5800 by selling 19 unwanted items this year.
- Shop around for cheaper mobile and home internet plans: This is the kind of bill people sign up to and then forget, and so checking the latest bundles could leave you with a saving of about $50 a month.
- If you have a child in daycare/preschool: Don’t be afraid to talk to your daycare and ask if they can offer you a shorter day at a lower rate or a discount. Many centres are losing families and may offer you a deal to stay.
It may be worth getting personal finance advice if you’re feeling the financial squeeze of COVID-19. The government’s MoneySmart website features a tool that’ll locate a free nearby financial counsellor.