JobKeeper recipients are still being taxed at normal rates on their $1,500-a-fortnight government Child Education Allowance Rules.
A Sydney man, who earned a high income before being laid off, was left with just $900 per fortnight after being taxed 40 per cent of his JobKeeper allowance.
This is even lower than the dole before tax, which is $1,100 every fortnight under the current JobSeeker allowance.
‘We’re grateful for anything, but $450 per week doesn’t cover the mortgage and car loans, so there’s nothing left for food or any utility costs,’ the man told .
He said it was ‘misleading and dishonest [for the government] to boast about giving $1,500 to families’ when he was only receiving $900.
People queue up outside a Melbourne Centrelink office following the announcement of the $1,500 JobKeeper allowance. A Sydney man, who earned a high income before being laid off, was left with just $900 per fortnight after being taxed 40 per cent of his JobKeeper allowance
The JobKeeper payment is treated as normal income and is therefore, taxable.
Those who earn less than the tax-free threshold of $18,200 will not be taxed.
However, those who are earn more than the tax-free threshold are still taxed depending on their respective tax bracket.
The tax-free threshold is the equivalent of earning $700 a fortnight, meaning that all JobKeeper and JobSeeker recipients are likely to be taxed.
If a person was on the JobKeeper allowance for a full year, this would mean they would earn $39,000 before tax.
But after their corresponding $4,222 of tax and the $780 medicare levy, they would receive $33,998.
This means the JobKeeper allowance is actually a minimum of $1,307.61 per fortnight.
People stand in a queue outside a Centrelink office in Sydney after the MyGov website crashed in March. If a person was on the JobKeeper allowance for a full year, they would actually receive $1,307.61 per fortnight after tax and the medicare levy
Meanwhile, if a person received the JobSeeker allowance for a full year in 2020, they would end up earning $28,600 as the allowance was only boosted from $550 per fortnight to $1,100 per fortnight on April 27.
After being taxed $1,976 and paying a $572 medicare levy, a JobSeeker recipient would end up with $24,076 this year.
As a result, the current JobSeeker allowance is actually like earning $1,002 per fortnight.
Employers will receive JobKeeper payments to pay their employees from May 6.