$60 billion JobKeeper error: Are your payments affected?
The estimated cost of JobKeeper has been cut from $130 billion to $70 billion, but what does this mean if you're already receiving payments?
There's been a pretty big error with the JobKeeper calculations in terms of the total cost of the scheme. The government's JobKeeper stimulus package, which offers eligible employers a wage subsidy of $1,500 a fortnight per employee, was originally reported to cost $130 billion. However, it's since been revealed there was a reporting error with this figure, and the total cost of the scheme is in fact $70 billion instead.
What does this mean for my current JobKeeper payments?
The cost of the JobKeeper program being halved is referring to the total estimated cost of the scheme. Importantly, it's not referring to the benefit amount of $1,500 per fortnight per employee.
So rest assured if you're currently receiving JobKeeper payments, thankfully nothing will really change for you. Eligible employers will still receive JobKeeper wage subsidies for each eligible employee it keeps on its books until October, when the scheme is set to expire.
If you're an employee and you've been deemed eligible to have your wages subsidised through the program, this will still be the case and you don't need to reapply. Similarly, employers don't need to reapply either.
How did the error happen?
How exactly such a significant error occurred is still a bit unclear. Treasury and the ATO said it was due to a large number of businesses making a similar mistake when applying for the scheme.
"The most common error was that instead of reporting the number of employees they expected to be eligible, they reported the amount of assistance they expected to receive. For example, over 500 businesses with "1" eligible employee reported a figure of "1,500" (which is the amount of JobKeeper payment they would expect to receive for each fortnight for that employee)," said a statement from Treasury.
Treasury also said this huge reporting error wasn't originally picked up by the ATO as it was instead focused on making the first round of JobKeeper payments to eligible employers on time.
What are the wider implications of this error?
Ultimately, this reporting error means the JobKeeper program is costing a lot less and also supporting far fewer employees. Revised figures from Treasury and the ATO estimate the JobKeeper program to be supporting 3.5 million workers. This is significantly down from the 6.5 million workers the scheme was originally said to be supporting.
There have been calls from unions and industry bodies to use the extra $60 billion to extend the JobKeeper eligibility to more casual workers (if you're a casual worker, here's how you can get help). There have also been calls to extend the scheme for another 6 months, to the end of March 2021. However, the government hasn't said that any of these suggestions are something it plans to do, or even consider, at this stage.
If you've had your income reduced to the $1,500 fortnightly JobKeeper payment, this guide can help you put together a budget to better manage your expenses with less money coming in.