Extract from The Guardian
Exclusive: The modest increase to the unemployment benefit is well below the $350 proposed by welfare advocates
Last modified on Tue 23 Feb 2021 03.33 AEDT
Government ministers have agreed to permanently lift the base rate of the jobseeker payment by $50 a fortnight when the coronavirus supplement ends next month.
It’s expected the government will outline the future of the unemployment benefit as soon as Tuesday but Guardian Australia has been told ministers on Friday agreed to a permanent boost to the base rate of jobseeker.
While other potential reforms to welfare payments are still being considered, it’s understood the expenditure review committee has agreed to the $50 a fortnight base rate increase.
That means the benefit will still drop below the current rate of $715 a fortnight when the $150 coronavirus supplement expires at the end of March.
The permanent $50 increase will begin on 1 April and will be applied to jobseeker, youth allowance, Austudy, Abstudy and parenting payments. It is expected to cost about $9bn over four years.
Before the pandemic, the base rate of jobseeker for a single person was $565 a fortnight, or about $40 a day.
It’s understood other possible changes – including potentially winding back more generous pandemic-era means testing and income thresholds – that could accompany the increase to benefits have not yet been finalised. Such changes could ultimately alter the net dollar benefit to recipients.
The office of the social services minister, Anne Ruston, would not comment.
Cabinet met on Monday night before the increase is expected to be put to the Coalition party room meeting on Tuesday.
Government ministers were tightlipped about the future of the jobseeker payment on Monday. The finance minister, Simon Birmingham, told ABC Radio the government was “still finalising all of our decisions in these areas”.
“We’ll make any announcements about that, as we’ve indicated, well and truly clear by the end of March,” he said.
Expectations have grown in recent weeks that the government would permanently increase the payment, with welfare groups, Labor, the Greens and even the Reserve Bank of Australia urging the Coalition not to allow the payment to fall back to the pre-pandemic rate.
But the planned increase to the dole – the first in real terms since the mid-1990s – is likely to anger welfare groups who had hoped the doubling of jobseeker payments 12 months ago would not be wound back so easily.
The Australian Council of Social Service has called for a permanent increase to jobseeker of at least $25 per day – or $350 a fortnight – while the Australian Unemployed Workers Union, backed by the Greens, want it raised to $80 a day, which is closer to the rate paid at the height of the pandemic.
The jobseeker payment was initially doubled with a $550 coronavirus supplement before the top-up payment was reduced in September and January.
Labor has declined to name a preferred figure but has called on the government to announce a permanent increase.
A new report from Anglicare Victoria shows the success of the coronavirus supplement in alleviating financial stress during the pandemic.
The report, released on Tuesday, found the agency’s financial counselling service saw a reduction in client numbers during the pandemic, which was attributed to the massive boost to welfare payments and the jobkeeper scheme.
A review of the service data of nearly 9,500 Victorian clients found more than a third had listed utilities such as electricity and water as a leading source of financial difficulty during the July-September quarter of 2020. That was followed by credit card and household debt (28%).
Although boosted welfare benefits were said to reduce demand for financial counselling, those who did need help were more likely to report “multiple vulnerabilities during lockdown”.
Nearly half said they were also facing family violence, mental illness or substance abuse as well as financial difficulties during the July-September quarter. In metropolitan Melbourne, 50.9% reported multiple vulnerabilities, up from 30.8% before the pandemic.
Clients were also more likely to report life events – such as job loss, health issues or a relationship breakdown – as a factor contributing to financial distress.
The Anglicare Victoria chief executive, Paul McDonald, said that overall the jobseeker and jobkeeper programs had “worked for those affected by Covid-19”.
“They gave people without work a better quality of life, helping them meet their debts and restore their dignity,” he said. “They gave people more ability to pay off outstanding debt and the research recommends that they should be permanent.”
About 1.3 million people are currently receiving unemployment benefits, up from about 700,000 before the pandemic, but a reduction from a peak of 1.6 million last year.
The jobkeeper wage subsidy is also due to expire at the end of March – a move which is expected to see some people lose their jobs and move onto jobseeker payment.
Analysis by Guardian Australia has found some of Australia’s poorest electorate will lose millions of dollars a fortnight when the coronavirus supplement ends at the end of March.
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