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The Impact of JobKeeper on Other Government Benefits

James Morris
Published by:
James Morris
Published on:
May 16, 2020
Modoras Accounting (QLD) Pty Ltd ABN 81 601 145 215
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.

Example scenario

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.

IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.

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