The Impact of JobKeeper on Other Government Benefits
With all the noise around JobKeeper, many are wondering if the Government Stimulus will affect pension payment. Food for thought… Here is how it works:
Payments are assessed as ordinary income for social security reasons. When already receiving benefits and concessions from Services Australia or the Department of Veteran Affairs, entitlement may be affected.
The JobKeeper payment of $1,500 per fortnight must be paid to eligible employees, regardless if it is more than their usual fortnightly earnings or greater than the wage payable hours actually worked during the period.
The increase in assessed income may impact social security benefits.
Impact on social security
For those who receive a social security benefit or concession card and begin to receive the JobKeeper payment, here are a few ways they could be impacted:
- Entitlement to the payment they are receiving may reduce.
- Payment of a pension or allowance could be cancelled.
- Where JobKeeper payments are backdated back to 30 March 2020, an overpayment of social security may occur.
- Concession cards may be cancelled.
Individuals who have their payments or concession card cancelled due to the JobKeeper payment would need to consider reapplying once eligibility returns.
If a person who receives an age pension and is also continuing paid employment or self-employment is now eligible and receives the JobKeeper payment, pension entitlement may be reduced. If pension entitlement reduces, entitlement to the pensioner concessional card could also be lost.
Fortnightly income test cut out thresholds for the age pension are:
- $2,062.60 for a single person, and
- $3,155.20 for couples combined
If a person receives the JobKeeper payment of $1,500 a fortnight and the Work Bonus of $300 a fortnight, this means the following can occur before entitlement to the age pension reduces to zero:
- A single person receiving JobKeeper can have other income of $862.60 per fortnight.
- Members of a couple who are both receiving JobKeeper can have other income of $755.20 per fortnight (combined)
If income results in a nil rate of payment for the pension, entitlement may be cancelled and reapplying after JobKeeper payments cease will be required.
Notifying of a change of circumstances
Services Australia requires notification within 14 days of a change of circumstances, this includes when a person begins to receive the JobKeeper payment.
Without immediate notification, it is possible to receive an overpayment of entitlements.
Those who have already lodged claims for income support through JobKeeper and payments are yet to commence, may consider withdrawing that application if JobKeeper would result in no entitlement.
It’s best to seek advice before taking any action to apply or cancel an application that receives the age pension.
Modoras is here to support you with your accounting or business advisory needs. Making the most of Government schemes can be difficult, contact a Modoras professional today on 1300 888 803.
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