Government toying with major reform to Centrelink payments

The federal government is reportedly considering streamlining welfare payments into a single payment for unemployed Australians receiving multiple supplements and subsidies.

According to The Australian, the government is investigating its options for a permanent rise in the JobSeeker base rate, with significant reform expected to accompany any increase to JobSeeker payments once the $150 coronavirus supplement expires at the end of March.

A suggestion made during a cabinet expenditure review committee meeting last week could lead to a permanent rise in the JobSeeker base payment, which is currently $565 a fortnight for a single non-renter with no dependants.

A senior government source told The Australian that a streamlined payment would replace low value supplements available to unemployed Australians and combine them into one single increased payment.

Read more: Services Australia using COVID-19 to transform Centrelink

This option would mean scrapping more than 20 supplements and replacing them with four new well-targeted payments, as suggested in the 2014 McClure review.

Every JobSeeker recipient receives a fortnightly energy supplement.

Many JobSeeker recipients are eligible for a list of low-value supplements including the pharmaceutical allowance, telephone allowance, literacy supplement and utilities allowances.

Around half of all JobSeeker recipients also qualify for rent assistance and family tax benefits

These high-value supplements would likely stay under any reform plan.

A permanent lift to the JobSeeker base rate would favour those receiving the maximum benefits.

The government has been hounded by calls from welfare lobby groups and the Reserve Bank for a permanent increase to the JobSeeker base rate once the COVID-19 supplement ends.

Read more: JobSeeker cuts to hit older Australians hardest

Treasury secretary Steven Kennedy said consideration was “more about the decision government needed to make about adequacy of the payment and how it intersects with incentives to work”.

Whatever the decision, most of those on welfare payments should be better off, said the government.

Federal Treasurer Josh Frydenberg will today release new Australia Taxation Office (ATO) data showing more than 2.13 million Australians were off JobKeeper payments by the end of 2020.

He also claimed the government had created 785,000 jobs in the past seven months and that more than 90 per cent of the 1.3 million jobs lost during the pandemic have been restored.

Read more: Older Aussies falling through the cracks in ‘silent crisis’

“With our economic recovery well under way, we have more than half a million businesses employing more than two million Australians graduating off JobKeeper,” said Mr Frydenberg.

While the end of March will see the end of the $150 per fortnight coronavirus supplements for JobSeeker recipients, the end of February is the cut-off date for the second of two $250 payments made to the following welfare recipients:

  • Age Pension
  • Carer Allowance
  • Carer Payment
  • Commonwealth Seniors Health Card
  • Disability Support Pension
  • Double Orphan Pension
  • Family Tax Benefit
  • Pensioner Concession Card
  • National Seniors Australia has also advised self-funded retirees to check their eligibility for the Commonwealth Seniors Health Card, and therefore their ability to claim the handout too.

While you may not have been eligible for the payment in 2020, Challenger’s chairman of retirement income Jeremy Cooper suggests now may be the time to review your finances to see if you qualify.

“Prudent retirees, whether they be 66 or 88, need to regularly revisit their financial position to determine whether they are receiving the maximum Age Pension income they are eligible for,” Mr Cooper told YourLifeChoices in the February 2021 Retirement Affordability Index.

“The March federal government support payment is a good example. There would be some retirees who would not have been able to access the Age Pension in December 2020, when the first $250 payment was made, but may now be eligible under the assets test.”

What do you think of streamlining Centrelink payments into four major payment categories? Will streamlining welfare payments make your life easier?

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Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

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