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JobKeeper slashed by $200: New pay cuts kick in today

Jessica Yun
·2-min read
Illustration of a surgery mask and Australian dollar notes are seen displayed.
Aussie workers on JobKeeper will see their pay cut again from today. (Source: Getty)

Aussies receiving the JobKeeper wage subsidy will now be feeling the pinch, with up to $200 shaved off the fortnightly payments from Monday.

From today, those receiving JobKeeper on Tier 1 will receive $1,000 (down from $1,200) while those on Tier 2 will now get $650 a fortnight (down from $750).

Prime Minister Scott Morrison announced the changes in July, stating that the payments needed to continue but become more targeted.

The tiering system and rate reduction came after a review into JobKeeper revealed that one-in-four Aussies on the wage subsidy were actually getting a pay rise of $550 on average per fortnight, which was described by then-Finance Minister Matthias Cormann as an “adverse incentive”.

“What the review also found was that there were a number of features of JobKeeper that created adverse incentives which may become more pronounced over time as the economy recovers,” Cormann said.

“This formed part of our considerations as we looked at the next phase of the JobKeeper program.”

The extension period kicks in today, 4 January, but the scheme is set to end completely on 28 March.

For businesses to receive JobKeeper this extension period, owners will have to demonstrate their GST turnover fell in the December 2020 quarter as compared to a comparable period (typically the same quarter in 2019).

Labor has criticised the cuts, noting that there are still 2.2 million Australians either looking for work or more work.

“Today’s cuts to JobKeeper ignore the increased stress on many businesses over the holiday period, particularly in parts of Sydney and surrounding tourist regions,” said Acting Shadow Treasurer Katy Gallagher, Shadow Minister for Industrial Relations Tony Burke and Shadow Minister for Employment Brendan O’Connor in a joint release.

“Many business owners are seeing holiday bookings cancelled or empty tables in their cafes and restaurants at what is usually their busiest time of the year.”

The shadow ministers noted that the JobKeeper cuts come just days after the JobSeeker boost was reduced by $100 on 1 January, leaving Australians who receive welfare support living on about $50 a day.

“On one hand the Government says the economy is doing well enough that businesses no longer need JobKeeper but on the other they say the economy is doing so badly they need to cut the pay of workers. They can't have it both ways.”

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