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Assessability of JobKeepr Payments

We have recently been asked a question about receiving JobKeeepr/JobSeeker payments in addition to income from a second employer. I will answer the question in two contexts:

  1. If your current job/position has been placed in hibernation and you do not receive income; or
  2. You receive additional income while also receiving JobKeeper or JobSeeker.

Job in Hibernation

JobSeeker has two components:

  1. Increase to entitlement, and
  2. Modified rules surrounding Centrelink’s income tests.

That means that a person can be in receipt of either JobSeeker or JobKeeper and still earn additional income from temporary, casual employment. Of course, such income must be reported to Centrelink and will be used to calculate JobSeeker entitlement.

How is Tax Calculated on Additional Income?

The question falls back on to the Tax File Number (TFN) Declaration an employee must provide to each employer. See a link below to a TFN Declaration on the ATO site as a reference point in answering this question.

Of particular importance is question 9, which will determine how much tax the employer withholds from your wage. The question relates to claiming a “tax-free threshold from this employer.” A taxpayer can only tax-free threshold ($18201) from one employer/payer at a time. It is taken into account when calculating the correct amount of tax to be withheld from income. Answering  NO to this question will trigger the employer to withhold additional tax.

The amount of additional tax will vary depending on the income received. The tables used to calculate the amount are an approximation based on the amount of income. Taxpayers need to be aware that other circumstances can impact that outcome.

However, it is simply a declaration you make to your employer, and you are free to fill it out however you like. I would not think the employer could or should force you to fill it in a particular way as they do not have full knowledge of your personal circumstances. Once that form is signed, it is between the employee and the ATO.

Job Placed in Hibernation

If your employer has been placed in hibernation, you may choose to engage in another position with another employer. When completing a TFN Declaration for the new employer, answer YES to question 9. Why>? Because the declaration you made with the original employer is also in hibernation.

Receiving Additional to JobSeeker

When you receive either JobKeeper or JobSeeker payments, you can choose to switch declarations between different employers. For example, you could receive JobKeeper from an employer and take a second employer’s temporary position. In this case, you could choose which employer you want to claim the tax-free threshold.

See the following link to the ATO for more details on the form:

Link to ATO ==>  TFN Declaration form


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