JobSeeker Payment: What Are The Tax Rules?

Many Australians are doing it tough at the moment, especially with widespread job cuts and business closures due to the global outbreak of COVID-19. The Australian Government is trying hard to support anyone in need as much as possible with a range of different stimulus payments.

There are three main stimulus payments currently available:

• A $550 Coronavirus Supplement available to people already on JobSeeker;
• A one-off $750 Economic Support Payment to help households stay afloat during the Covid-19 period, and;The $1500 JobKeeper Wage Subsidy.

What’s the difference between JobSeeker Payment and JobKeeper Payment?

JobKeeper Payment is a $1500 per fortnight wage subsidy that has been specifically designed to help Aussies stay in their jobs during the COVID-19 pandemic. It is available to full-time, part-time and casual workers who have been employed for at least 12 months, it’s paid out by your employer and you can only receive the payments from a single employer.

JobSeeker Payment is a government payment for Aussie citizens and residents who are aged between 22 and 66 and have lost their jobs or income. During the period of the COVID-19 crisis, the payment has increased by $550 per fortnight.

Who can get JobSeeker?

To be eligible to receive JobSeeker Payment, you need to:

• Be between 22 and 66 years of age
• Have an income and assets under the test limits
• Meet residency rules

You also need to be either:

• Be unemployed and looking for work, or
• Sick or injured, and unable to do your usual work or study for a short time.

You may also be eligible if you’re:

• A permanent employee and have lost your job due to COVID-19
• A sole trader, self-employed, a casual or contact worker and your income has reduced due to COVID-19
• Caring for someone who’s affected by COVID-19.    

How much do you get for JobSeeker Payment and how do you claim it?

All JobSeeker payments are made once a fortnight and the amount depends on your personal situation, including whether you have any children or a partner and how much money you have earner in the past 14 days. The amount ranges from $565.70  to $790.10, and all payments from late April 2020 include an additional Coronavirus Supplement of $550 per fortnight. The payment can be claimed online if you have a myGov account linked to Centrelink and it can be tracked using the Express Plus Centrelink mobile app.

What are my obligations with JobSeeker Payment? 

To continue receiving JobSeeker payments from the Australian government, it’s essential that you:

• Report your income fortnightly, and
• Agree to a job plan that includes applying for jobs, training or studying

Failure to stick to the rules can result in you having to repay any money received incorrectly and possibly even more severe penalties.

Do I have to pay tax on JobSeeker Payment?

Yes – but tax is not automatically taken out of your payment. You can choose to have it taken from your payment by the government and this is called a tax deduction. This deduction will appear on your payment summary, which shows total payments you received throughout the year and any tax deducted from this payments.

You can choose for us to deduct the tax as either a:

• Percentage of your total taxable payments
• Dollar amount

By taking these deductions, you will make small tax payments throughout the year and won’t have to deal with a lump sum to be paid at the end of the year.

Still have some questions about JobSeeker? Talk to H&R Block. Our experienced tax consultants will be able to help. Call 13 23 25 for details or find your nearest office and book an appointment online.