Government announces Christmas cut to income support payments

The Morrison government has made a decision on the future of the JobSeeker coronavirus payments, with both good and bad news for those older Australians relying on the money after finding themselves unemployed during the pandemic.

The coronavirus supplement will be extended beyond the current 31 December cut-off, for a further three months but at a reduced rate of just $150 per fortnight, down from the $550 a fortnight when it was first introduced, and $100 a fortnight less than the rate at which it has been paid since 25 September.

Last month, the Parliamentary Budget Office said that the JobSeeker payment was “functioning as a kind of pre-Age Pension payment for some older Australians”, with an increasing number of older men and women relying on the payment.

The payment of the coronavirus JobSeeker supplement at the new rate will come into effect from 1 January 2021 and will extend through to 28 March 2021.

In the early days of the pandemic, the JobSeeker coronavirus supplement was paid as a $550 fortnightly payment, but this was scaled back to $250 a fortnight from 25 September.

Prime Minister Scott Morrison said the extension of the measure is estimated to cost $3.2 billion over the three months.

“Cabinet has considered it, it has gone through our party room this morning and legislation will come … later this week,” Mr Morrison said.

“We cannot stay stuck in neutral in this country, we have got to keep moving forward, like the emblems on our national crest, the kangaroo and the emu, they only go forward, and that can be the only plan for Australia.”

Social Services minister Anne Ruston said the government would also be increasing the income free area, which is currently at $300 per fortnight, to encourage people back into the workforce.

“We want to encourage Australians to dip their toe back into the jobs market and test their ability to get work,” Ms Ruston said.

“We know that people who report earnings are twice as likely to actually come off the payment in the short term than those who do not report any earnings at all.

“We will be maintaining the elevated level of the partner taper rate, which means people whose partners are earning up to $80,000 per year will also be able to gain access to the payment.

“In addition, the expanded eligibility criteria will cover people who are sole traders, people who are self-employed, those that have been stood down but remain connected to their workplace, people who were in isolation and people who have to care for somebody in isolation.”

Australian Council of Social Service (ACOSS) chief executive Dr Cassandra Goldie called on the federal government to put in place a permanent, adequate rate of income support.

“The end of the year is often the most expensive time for families and this Christmas is going to be a really hard one for millions, with record-high unemployment,” Dr Goldie said. “Already, retailers are bracing for a slow holiday season, following a tough year.

“We’re warning the government against a Christmas cut for people on the lowest incomes. This would be a cruel and damaging mistake, hurting people doing it tough, as well as the country’s economic recovery.

“Instead of short-term measures and cuts, we need a permanent, adequate rate of income support so that people can cover the basics and rebuild their lives.”

Anglicare Australia also urged the government to reconsider the cuts.

Anglicare Australia deputy executive director Imogen Ebsworth said it was clear that there were not enough jobs for the people that needed them in the current climate and there ought to be more relief.

“This new cut will cause anguish and real hardship for Australians out of work. It will push them into poverty – instead of helping them stay on their feet,” she said.

Ms Ebsworth backed calls to raise the JobSeeker rate above the poverty line permanently.

“People will be recovering from this pandemic for months and years to come. They need certainty. That means a permanent increase, not more cuts. We should be supporting everyone to recover from this crisis,” she said.

“Instead of helping people plan for their future, these changes will simply ‘phase in’ poverty.”

“The old rate of JobSeeker was frozen for almost three decades. It became a poverty trap, locking people out of work and forcing them to turn to agencies like ours just to get by.

“It’s time for to the government to raise the rate for good, instead of leaving people behind,” Ms Ebsworth said.

Older workers also have good reason to keep an eye on the Senate on Tuesday, with debate starting on the government’s JobMaker hiring credit.

The scheme, announced in last month’s Budget, aims to provide employees with a financial incentive to hire younger workers.

The scheme has come under attack from many sectors for failing to protect older workers, with many forecasting businesses will fire more mature and experienced staff with the aim of reducing expenses.

Independent senators Rex Patrick and Pauline Hanson have announced that they are not supporting the bill as it contains too many flaws, while Labor and the Greens are proposing several amendments to add in protections for older workers.

I’m not supporting the JobMaker bill because all the ‘laws’ are contained in rules made by faceless officials. PHON is not supporting. Govt doesn’t have the numbers to pass it without Labor. Labor are ideally placed to get necessary changes. Let’s see how skilled they are #auspol pic.twitter.com/2VHyCiLrXK

— Rex Patrick (@Senator_Patrick) November 9, 2020

Labor’s proposed amendments require the Australian Taxation Office (ATO) to publish information about the performance of the scheme, create reporting requirements for companies receiving JobMaker credits and state that government must create avenues for whistleblowers and dispute resolution procedures for the program.

The Greens are seeking to limit the scheme to companies that haven’t increased their dividends during the pandemic, ban them for companies that have underpaid their workers and prevent companies sacking staff and claiming the credits.

Do you think the JobSeeker coronavirus supplement should continue at the current rate? Do you support a permanent increase to the JobSeeker payment? Would you like to see the JobMaker legislation defeated to protect the jobs of older workers?

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