Prime Minister Scott Morrison has extended elevated Jobseeker payments until March next year to provide further temporary relief for unemployed Australians.
But a coronavirus supplement to the welfare payment will be further wound back to $150 per fortnight, as the support is continued for another three months into next year.
This means the total Jobseeker payment will reduce from $815 a fortnight to $715 a fortnight from 1 January.
Mr Morrison said no decision has been made on a permanent increase to the welfare support.
“We haven’t made a final decision on that. What we are focused on right now is the emergency measures that need to be in place for the pandemic,” he said.
“There are issues that relate to the question you have raised, they are certainly there. But right now, what matters is the supports that will continue to be provided at these elevated and temporary levels.”
The coronavirus supplement, originally paid at $550 per fortnight, was cut at the end of September to $250 a fortnight until 31 December.
But the temporary reprieve has not satisfied welfare organisations calling for a permanent increase to the dole.
Australian Council of Social Services CEO Dr Cassandra Goldie warned against the government cutting income support for people on the lowest incomes.
“This is a huge mistake. If they don’t they don’t reverse this decision we will be facing a tsunami of financial distress as we go in to the Christmas period,” Ms Goldie said.
The coronavirus recession has resulted in a surge in unemployment with the jobless rate standing at 6.9 per cent in September.
More than 1.5 million Australians on JobSeeker, Youth Allowance and parenting payments are currently receiving welfare payments boosted by the coronavirus supplement.
Prime Minister Scott Morrison announces cut to JobSeeker from December
Mr Morrison said as the economy recovers from the coronavirus crisis, the “right settings” had to be in place to support employers increasingly looking for people to come back to work.
“As the economy starts to move back and confidence lifts and jobs come back, we cannot allow our safety net to hold people back,” he said.
“We want them to be able to bounce back and get back into the jobs that are increasingly becoming available.”
Labor is pushing for the coronavirus boost to remain at $250 a fortnight and have also longed called for a permanent increase to the base rate of JobSeeker payments.
Opposition leader Anthony Albanese said now is not the time to be withdrawing support from the economy.
“Why are they cutting things right now – that’s what’s extraordinary, he said.
“When the government itself says more people will be going onto unemployment benefits between now and Christmas.”
Once the supplement is removed, these payments are set to return to their pre-pandemic rate of $40 a day.
Mission Australia CEO James Toomey said the elevated levels of income support had made a huge difference to the lives of those dependent on the welfare payments.
“We urge the government to refrain from making any cuts to financial support for people on the lowest incomes,” he said.
“Now is the time to provide certainty beyond March and lock in a new, permanent and adequate rate of income support to restore dignity and so that everyone is included in the recovery ahead.”
The income-free area, which allows welfare recipients to earn $300 per fortnight without having their payments docked, is also being extended.
The expanded eligibility criteria for sole traders and the self-employed and elevated partner taper rate have also remained in place.
Mutual obligation requirements for jobseekers have been gradually re-introduced since September across the country except in Victoria.
Additional reporting by AAP
