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Ever-changing requirements that make it almost impossible for families to access JobKeeper payments

A bureaucratic quagmire surrounding JobKeeper payments makes it nearly impossible for many desperate workers to access the cash, thanks to a series of cracks in the system.

On April 8, the government passed a $130billion package aimed at keeping Australians in work during the pandemic – with payments due to start on Wednesday.

But a dizzying list of confusing requirements bars many people from being eligible, even for the most mundane of reasons, with rules changing retroactively.

The baffling array of rules is revealed after the government made a last minute change which shut out thousands of workers who were relying on getting the payments.

On May 1, the government made an 11th hour change to JobKeeper requirements, which excluded companies owned 100 per cent by foreign governments. 

 

School students with part-time jobs will only be eligible for the payments until May 11 after criteria was changed (pictured, Brisbane schoolchildren on March 24)

This included a catering company, Dnata, which employs 5,500 workers across Australia to produce meal for businesses such as Qantas, but is owned by the government of Dubai.

Workers were originally told they’d be covered by the JobKeeper payments but the retroactive change to legislation has left workers scrambling to find ways to supplement their income.

The company said they had kept their employees on the books under advice from the Australian Taxation Office that workers would be eligible.

A similar situation has unfolded for school students, aged 16 or 17, who have had the payments taken away from them by the government.

If they have part-time jobs, school students are eligible for up to $4,500 of the money – but they have since been told payments will be switched off on May 11.

A shut down café for sale in Mollymook on the NSW south coast (pictured on April 7) after businesses across the country were hit by COVID-19 restrictions

A shut down café for sale in Mollymook on the NSW south coast (pictured on April 7) after businesses across the country were hit by COVID-19 restrictions

5,500 workers at Dnata (pictured at Adelaide airport on April 1), which supplies frozen meals to businesses like Qantas received the news they were no longer eligible for JobKeeper

5,500 workers at Dnata (pictured at Adelaide airport on April 1), which supplies frozen meals to businesses like Qantas received the news they were no longer eligible for JobKeeper

The last-minute change to the rules bars 16 and 17 year-olds unless they live away from their parents and only study part-time.

It means full-time students, and those living at home, will be ineligible within weeks.  

The payments had meant a huge boost for school students’ wages, as the JobKeeper wage subsidy is a flat $1,500 a fortnight, no matter how many hours are worked. 

Generally, both full and part-time workers, as well as sole traders, can apply, if the business they work for is eligible.

JobKeeper payments can be made for the period beginning March 30, and companies must apply by May 31.

If a business has an annual turnover of less than $1 billion, its revenue has to have dropped by at least 30 per cent since March 1.

This means a local cafe which usually turns over $15,000 a week would need to be losing more than $4,500 every week to be eligible.

This means that if such a cafe lost $4,000 every week, it would receive no help at all – and may be forced to let staff go. 

WHAT BUSINESSES ARE NOT ELIGIBLE FOR JOBKEEPER?

The following types of companies are barred from accessing the JobKeeper payments.

– Those who are subject to the Major Bank Levy, including Commonwealth Bank, ANZ Bank, Westpac, National Australia Bank and Macquarie Bank 

– Australian government agencies

– A local governing body, such as a local council  

– A entity wholly owned by an Australian government agency or local governing body

– A sovereign entity, such as a foreign government

– Companies solely owned by a foreign government

– A company in liquidation

– An individual who has entered bankruptcy

– If part-time employees are 16 or 17 years-old and still study full-time, or live at home (ineligible from May 11) 

Source: Australian Taxation Office

For bigger businesses turning over more than $1billion a year, it has to show a 50 per cent or greater reduction in revenue.

If a casual worker – those not on permanent contracts – has been at a company for less than 12 months, they are not eligible for payments. 

But the payments are not means-tested, meaning no matter how much someone earns, or has in savings, they could still be eligible. 

Thousands of foreigners on working visas are also not eligible, but backpackers can extend their stay in Australia instead.

The majority of temporary visa holders, including the thousands on Working Holiday visas, are instead allowed to access their superannuation early. 

While seasonal workers on these popular visas can usually only work for an employer for six months, they will now be exempt from this rule. 

Workers at Australia's major banks, such as ANZ (pictured) are not eligible for the JobKeeper payments

Workers at Australia’s major banks, such as ANZ (pictured) are not eligible for the JobKeeper payments

Local government workers will also not be able to get the payments, which are first paid to their employer (pictured, Paddington's town hall in Sydney)

Local government workers will also not be able to get the payments, which are first paid to their employer (pictured, Paddington’s town hall in Sydney)

International students do not qualify for the payments. 

New Zealanders on 444 visas are eligible, after Prime Minister Scott Morrison announced these workers are ‘part of an ongoing economy in Australia’. 

‘We are about keeping them part of it economy because they are part of what happens on the other side,’ he told reporters in Canberra. 

The government also announced it will allow backpackers to extend their stay in Australia and most temporary visa holders to access superannuation payments early. 

The major banks subject to the banking levy are also not eligible, meaning workers at Commonwealth Bank, ANZ Bank, Westpac, National Australia Bank and Macquarie Bank cannot receive payments.

Not-for-profit entities, such as charities, are allowed the payments as long as their turnover has dropped by 15 per cent or more – a much lower threshold.

Workers were told via email on Monday (pictured) they would not be receiving payments though the government's JobKeeper program

Workers were told via email on Monday (pictured) they would not be receiving payments though the government’s JobKeeper program

But the same can’t be said for universities, one of Australia’s biggest exports, which are not allowed the lower 15 per cent threshold applied to charities.

HOW IS TURNOVER CALCULATED FOR JOBKEEPER?

The turnover calculation is based on a companies sales, not including GST.

To work out if your turnover will decline by enough to be eligible for payments, you need to compare sales (or likely sales) for a recent month (usually March or April 2020), with the same month last year. 

You can also use the April to June quarter to compare the same quarter last year. 

In working out what is likely, you need to make a reasonable estimate and document your reasons at the time of applying the test. 

Some of the exclusions to turnover include input taxed sales (e.g. bank interest, sale of shares, residential rental income) and sales not connected with your business type (e.g. sale of private car). 

Source: Australian Taxation Office 

Instead, on April 24 the government stipulated that universities must include funding from commonwealth grants towards their revenue.

Under strict rules, when working out their projected downturn, universities must count six months of revenue – rather than one month or three months like other businesses.

The combination of confusing restrictions mean no university in the entire country qualifies for JobKeeper.   

Public sector employers are also bared from the payments, with this also applying to local councils. 

Speaking about the change to the scheme which bars companies owned by foreign governments from applying, workers called it a ‘kick in the guts’.

‘Dnata enrolled for the scheme and implemented plans for the retention and payment of our Australian employees on this basis,’ a Dnata spokeswoman said.

The company believes the changes are unreasonable because it employs a large number of local workers and is an Australian resident company for income tax purposes.

The business has also invested $300 million over the past 13 years on job creation, infrastructure and technologies, including the $150 million takeover of Qantas’s catering business. 

People line up outside of a Centrelink office in Melbourne on April 20, after thousands of Australians lost their jobs

People line up outside of a Centrelink office in Melbourne on April 20, after thousands of Australians lost their jobs

Shops across Australia, including this H&M store in Melbourne (pictured on April 5) closed its doors in response to the ongoing coronavirus pandemic

Shops across Australia, including this H&M store in Melbourne (pictured on April 5) closed its doors in response to the ongoing coronavirus pandemic

The Australian Services Union said it was fighting to overturn the changes to protect the wages of the customer service, cargo and ramp employees of Dnata.

‘This announcement will come as a complete shock and no doubt will be extremely concerning and upsetting for you,’ the ASU said in a statement.

‘Please rest assured that the ASU will do everything within its power to attempt to get this outrageous narrow minded decision changed so that you get the support that you deserve.

‘Scott Morrison took JobKeeper away from you with the stroke of a pen and we will be demanding that he fix the problem that he has created.

The airline worker’s union has written to Federal Treasurer Josh Frydenberg urging him to fix the ‘loophole’ and provide support for workers in the commercial aviation industry.

Queues are seen at the east Sydney Centrelink offices on April 14, after more than 1.34 million people claimed the JobSeeker allowance.

Queues are seen at the east Sydney Centrelink offices on April 14, after more than 1.34 million people claimed the JobSeeker allowance.

Australia is home to 9,946 foreign-owned businesses, data from the Department of Foreign Affairs and Trade and Austrade showed. 

In a letter to Treasurer Josh Frydenberg, TWU national secretary Michael Kaine and ASU assistant national secretary Linda White warned that the Australian economy would suffer if such companies collapsed.    

‘It will mean airlines will not be able to return to full capacity in the short to medium term,’ it read.

‘We hope you will consider the plight of thousands of workers today and examine this loophole.’

It went on to say workers in such industries, and their families, would be ‘devastated’ by the ‘unintended consequences of this loophole’.  

People are seen queuing outside a Centrelink office in Adelaide on April 16, with many more workers needing helping during the coronavirus crisis

People are seen queuing outside a Centrelink office in Adelaide on April 16, with many more workers needing helping during the coronavirus crisis

‘The Jobkeeper Payment has given them certainty about their futures and their income and has them on standby to return to work when the Government lifts its travel restrictions,’ it read.

‘Without it their jobs are under threat and their futures are entirely insecure.’ 

A Treasury official said government employers were better positioned to support their staff during the financial downturns. 

‘Government employers are considered to have a greater capacity to support their employees through this period than private businesses,’ the spokeswoman said. 

As for JobSeeker payments, the maximum $550-a-fortnight payment was doubled to $1,100 to help households stay afloat during the pandemic.

But even before that adjustment, which came into effect on April 27, many out of work were already experiencing problems getting the payments.

‘We will be supercharging the safety net,’ Mr Morrison said. ‘We will be supporting the most vulnerable to the impacts of the crisis.’

The airline workers union has written to Federal Treasurer Josh Frydenberg (pictured) urging him to fix the 'loophole' and provide support for workers in the commercial aviation industry

The airline workers union has written to Federal Treasurer Josh Frydenberg (pictured) urging him to fix the ‘loophole’ and provide support for workers in the commercial aviation industry

A STEP-BY-STEP GUIDE FOR HOW TO BUDGET ON JOBKEEPER

Millions of Australians will be paid around $670 a week after tax under JobKeeper, with more than 850,000 businesses registering so far. 

Helen Baker, a financial advisor and spokesperson at Money.com.au, said it will be ‘extremely difficult’ for families to get by on such a paltry sum.   

‘An income of $670 will be extremely difficult to get by on and is not sustainable over the long term,’ she told Daily Mail Australia.

Below is her top tips for staying afloat on the JobKeeper or JobSeeker payments, and the ideal budget you should stick to. 

Her top tips include: 

–  Making arrangements banks, landlords, insurers and utility providers to defer or reduce payments

– Seeking bulk-billing medical services where possible

– Applying for a reduction to rent, and asking for a deferral of mortgage repayments  

– Ensuring other financial commitments have been delayed for six months

– Eliminate non-essential spending  

‘The budget caters for a healthy, single person without large ongoing expenses, or in need of ongoing medical support,’ Ms Baker explained.  

‘We want to show Aussies how they can live off these funds and best manage their finances until they can get back to earning their normal income.’

She explained that JobSeeker and JobKeeper recipients should make tweaks to the budget to tailor it to their individual circumstances. 

‘Once you have your budget outlined, use it to negotiate with your financial services providers and/or landlord to negotiate payment reductions or deferral options until the crisis is over,’ she said.

‘The budget will clearly show your bank or landlord not only that the amount of money coming in will be less than the amount going out, but by how much you will need to reduce your payments.’

‘Remember this isn’t meant to be forever. It’s just about keeping your head above water for now.’ 

BUDGET FOR JOBSEEKER RECIEPENTS ($550 per week) 

Rent $200/week

Electricity $150/quarter ($12/week)

Internet and mobile phone $105/month ($25/week)

Supermarket items and produce $150/week

Cosmetics and toiletries $7/week

Hairdresser $0/quarter

Car (includes petrol, parking and tolls) $50-65/week

Public transport $40/week

Streaming subscriptions $24/month ($6/week)

Alcohol $30/week

Eating out $10/week

BUDGET FOR JOBKEEPER RECIPIENTS ($670 per week)

Rent $300/week

Electricity $200/quarter ($15/week)

Internet and mobile phone $105/month ($25/week)

Supermarket items and produce $140/week

Cosmetics and toiletries $7/week

Hairdresser $75/quarter ($7/week)

Car (includes petrol, parking and tolls) $50-65/week

Public transport $40/week

Streaming subscriptions $24/month ($6/week)

Alcohol $20/week

Eating out $20/week 

Read more at DailyMail.co.uk


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