How to budget on JobKeeper or JobSeeker payments
Tips to help you cover your rent, bills, groceries, essential household items and transport costs while you're relying on JobKeeper or JobSeeker.
How much is the JobKeeper payment?
The government is offering eligible employers a wage subsidy of $1,500 per fortnight per staff member. The purpose of JobKeeper is to encourage employers to keep staff on their books, which will in turn help keep more people in a job (even if it is on a reduced income).
The way this scheme works is that your employer (if eligible) will pay you either your normal salary or a reduced salary, and the government will refund your employer up to $1,500 a fortnight for each eligible staff member.
For many employees, this means that your income may have been reduced to that of the $1,500 fortnightly JobKeeper payment, which is $750 a week, or about $670 a week after tax. The government will be offering this JobKeeper wage subsidy for six months between May and October 2020.
How much is the JobSeeker payment?
The JobSeeker payment (previously called Newstart) is the new, primary benefit paid to Australians without a job who are seeking work. It pays $565.70 per fortnight for singles, and slightly more for Australians with kids. The government is also offering an additional Coronavirus Supplement of $550 per fortnight on top of the JobSeeker payment for six months until October 2020.
This means that if you're eligible to receive the JobSeeker benefit plus the temporary Coronavirus Supplement, you'll get $1,115 per fortnight, which is about $515 a week after tax.
Why should I create a new budget while I'm on JobKeeper or JobSeeker?
If you're now relying on JobKeeper or JobSeeker payments, it's likely that your regular income has been reduced by a fair amount. According to the Australian Bureau of Statistics, the average weekly earnings for full-time workers in Australia is $1,659 (or $3,318 per fortnight).
Even if your income is below average, it's likely that the $1,500 fortnightly JobKeeper payment or the $1,115 fortnightly JobSeeker payment will be less than what you were earning before. This means you'll need to reassess your budget.
How to budget on JobKeeper or JobSeeker payments
There's no one-size-fits-all budget that will work for everyone on these benefit payments. We all have different expenses, different living arrangements and different bills to pay. However, we can generally all break down our living expenses into a few groups.
To create your budget, here's an idea of how much of your benefit payment you should allocate to each category:
- Rent or mortgage repayments and essential bills: 50-60%
- Food and household essentials: 20-30%
- Car and transport costs: 5-10%
- Extras and incidentals: Less than 10%
Remember that this is a starting point only, and your budget might look a bit different depending on your individual expenses. But the principle behind the suggested percentages remains the same for everyone. That is, the bulk of your payment should be used for major living expenses and essential bills, and the least amount of money should be spent on incidentals.
Let's take a closer look at each of these four categories with some examples of how to stick to this suggested budget.
Rent or mortgage repayments and essential bills
JobKeeper budget: 50-60% of your payment ($335-$400 per week)
JobSeeker budget: 50-60% of your payment ($260-$310 per week)
- Rent or mortgage: The government has told landlords they need to negotiate fairly with tenants who have lost income due to coronavirus. If you're renting, speak with your landlord about reducing your rent for six months while you're relying on JobKeeper or JobSeeker. If you're a homeowner, a number of lenders are offering mortgage relief packages to help you meet your repayments.
- Essential bills: Try to keep your home Internet, mobile and utility bills below $60-$100 a week. If you're working from home, you might find that you no longer need to be paying for mobile data as well as home Internet. Some home Internet and energy providers are offering financial relief and assistance to customers impacted by the coronavirus pandemic. If your provider won't offer financial relief, consider comparing energy and Internet providers and switching to one that's cheaper. Contact your health insurance provider and discuss the possibility of dropping the price temporarily, or perhaps consider dropping your extras.
You might have more, or less, expenses than those mentioned above. If your expenses are lower, that's great. This means that you can allocate more of your budget to the following categories instead. If your expenses are higher than this, you'll need to cut down on your budget for the below categories.
Food and household essentials
JobKeeper budget: 20-30% of your payment ($150-$200 per week)
JobSeeker budget: 20-30% of your payment ($100-$155 per week)
- Groceries: Try to keep your weekly grocery bill as low as possible. Swap brand name items for home brand, buy things in bulk if you can (and we don't mean panic shop!) and go to discount supermarkets like Aldi. Plan cheap meals that allow for lots of leftovers (like pasta, stews, soups and rice dishes) and consider cutting back on little luxuries like takeaway coffee and alcohol.
- Household essentials: Outside of food, try to keep your shopping budget reserved for household essentials only. Things like toothpaste, toilet paper, toiletries, cleaning supplies and school books.
Again, this budget isn't going to be perfect for everyone. You might find that a budget of up to $200 a week for groceries and household items is far too generous. If this is the case, you can allocate additional budget to the following categories instead.
For more ideas on how to reduce your spending, take a look at our guide on 50 easy ways to save money.
Car and transport costs
JobKeeper budget: 5-10% of your payment ($60-$70 per week)
JobSeeker budget: 5-10% of your payment ($26-$50 per week)
- Petrol, public transport, tolls and parking: Thankfully, petrol is quite cheap at the moment. But you should try to keep your driving to a minimum and only make trips that are essential. If possible, you could consider switching to public transport to avoid tolls and parking fees.
- Car loan repayments: There are a number of things you can do if you're struggling to meet your car loan repayments. Speak to your lender about the option of pausing repayments, decreasing repayments, waiving late fees and charges or extending your repayment deadlines.
If you're struggling to keep your car and transport costs within this budget, you can increase it by cutting back on your food and household items. Or, if you don't have any car or transport expenses, you can allocate this part of your budget into another category where you need a bit extra.
Extras and incidentals
JobKeeper budget: 5-7% of your payment ($40-$50 per week)
JobSeeker budget: Less than 7% of your payment ($40 or less)
This category is for things that could be better described as "wants" rather than "needs". It's important that you allocate your payment to the previous three categories first before you allocate any spending to this category. Particularly if you're currently relying on JobSeeker payments, which are significantly lower than JobKeeper payments.
- Streaming services: If you're short on cash, you should consider temporarily cancelling your streaming services like Netflix and Stan, or swap to one with a free trial. At the very least, you should make sure you only have one streaming service.
- Takeaway meals: Cooking is almost always cheaper than getting takeaway meals. If you do want to get takeaway meals, try to limit it to just once or twice a week and look for deals and specials (a lot of places have cheap lunchtime offers).
- Extras: Things like new clothes or household items that aren't essential should only be considered if you've got enough left in your budget. If you do find that you have a little bit left in your budget, we'd highly recommend putting it aside into a savings account or fee-free bank account to help cover unexpected expenses in the weeks and months to come. This money can help you pay for things like fines, urgent home or car repairs and maintenance, last-minute gifts or unplanned medical expenses.
Do you need more financial support?
This budget is a great starting point to help you manage your spending and expenses while you're on JobKeeper or JobSeeker payments, but it won't be the perfect solution for everyone. You might even be eligible to receive another Centrelink benefit or payment as well, depending on your circumstances.
If you're looking for some more tips and strategies to help you manage your finances during the coronavirus pandemic, we've got a guide for that too.
If you need emergency financial help, learn about your options in this guide.
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