Easy ways to prepare for JobKeeper, JobSeeker shake-up
Millions of Australians will have their JobKeeper and JobSeeker payments wound back next week and will be forced to reassess their financial situation.
About 3.6 million Australians are on JobKeeper and 1.82 million are receiving Jobseeker payments.
Despite recipients seeing their payments fall from September 28 it's important those impacted do a budget and set up a savings plan to adjust.
New research by MyState Bank showed one in two people have dipped into their savings during the pandemic to make ends meet.
Four in 10 people did not have an emergency fund before the outbreak of the COVID-19 pandemic.
MyState general manager Heather McGovern urges Australians to reassess their finances if they are about to suffer an income hit due to the payment changes.
"Take the time to scrutinise your spending including your discretionary spending and the bills as well and challenge yourself to say do I need to be spending this," she says.
"About one third of Australians have had to dig into their savings to get by, but this is a better option than rocking up a debt on a credit card."
Some of the best techniques includes setting up direct debit payments into a separate bank account so a case of out of sight out of mind.
Some savings accounts don't have cards linked to them which makes it harder to withdraw money.
Trent Thistleton, 23, and his girlfriend Alana Sharpley, 19 both work as bartenders in Sydney and have taken financial hits during the pandemic.
As a result of restrictions to the hospitality industry they have been unable to work.
Thistleton is on Jobseeker and Ms Sharpley is on JobKeeper but he says the government handouts were not sufficient for him to survive.
"The Jobseeker payments weren't enough so I've had to dip into some of my savings," he says.
"I don't have any debts besides a HELP debt, so I've had to spend a few thousand of my savings to get by."
Accounting software firm MYOB's head of product Dale Dixon says the extension to JobKeeper until March will help many cash-strapped businesses and employees but he urged people to prepare.
"For individuals already enrolled for JobKeeper before 28 September you won't need to re-enrol, but there are some steps you can take to get prepared," he says.
"Business owners are required to check on eligibility again and notify the ATO which tier they're accessing for their employees before claiming JobKeeper extensions."
Mr Dixon also recommends employees contact their employer to check their eligibility for the payments in the coming months.
"Also keep in mind the amount for JobKeeper extension may differ from current entitlements, which could impact on personal budgeting or other government allowances such as Family Tax Benefit," he says.
"Remember your accountant or bookkeeper can help you navigate whether you're looking at this as an employee or an employer."
• Fortnightly payments drop from $1500 to $1200 for employees who were working more than 20 hours a week.
• People working less than 20 hours will receive $750 a fortnight.
• Check with your employer on your eligibility.
• Fortnightly payments will stay the same of $565 per fortnight until September 24.
• Jobseeker coronavirus supplements are being cut back from $550 to $250 a fortnight (this is based on an individual with no children) until December 31.