The JobSeeker boost will be extended to December but at a reduced rate, the prime minister confirmed on Tuesday.
The $550 per fortnight Coronavirus Supplement has been boosting the dole rate to $1,115.70 per fortnight since the end of March, but will be revised down to $250 per fortnight come September.
That would bring the total fortnightly payments to $815.70 per fortnight.
The government is also increasing the income-free threshold to $300, meaning recipients can earn $300 without it affecting their payments.
Mutual obligations will also be reintroduced in two phases, the Prime Minister said.
From 4 August, the government will be requiring Australians to connect to employment services to undertake four job searches a month, with a penalty to those who refuse a job that was provided through that process.
“So if there is a job to be taken and a job that is being offered, then it is an obligation, a mutual obligation, for those who are on JobSeeker to take those jobs where they're on offer,” the Prime Minister said.
From September, recipients will be subject to a higher job search rate: “We'll be reintroducing the assets test for eligibility for those payments and we'll be reintroducing assets waiting period at that time,” Morrison said.
When asked whether the government anticipates a further extension to the supplement after December, the Prime Minister said he was “leaning heavily” towards the notion that there would be a need to continue the Covid-19 supplement post-December.
Extending the supplement until December is expected to cost around $3.8 billion, with the total cost of the supplement around $16.8 billion.
It comes as a Treasury review into JobKeeper found a quarter of recipients had an income increase of around $550 relative to their February earnings - the same fortnightly amount that JobSeeker recipients and Youth Allowance recipients receive from the Coronavirus Supplement.
The extension announcement follows reports that a further 650,000 Australians - including children and half a million renters - would fall into poverty once the Supplement ended in September.
“If the coronavirus supplement is removed at the end of September as planned, the number of people in poverty will increase by more than 650,000, from 3.58 million to 4.24 million,” Australia Institute senior economist Matt Grudnoff said.
Mozo analysis also found 26 per cent of Australians (1.3 million people) would be unable to afford their mortgage repayments or rent once the JobSeeker boost and JobKeeper payments end.
The reduction in the JobSeeker boost has been dubbed a “needless attack on working people, families and low income people across the country” by GetUp’s economic fairness campaigns director Ed Miller.
GetUp estimates 1.7 million Australians will be forced into poverty as a result.
“There are currently 1.7 million people on JobSeeker, and only 110,000 private sector vacancies,” Miller said.
“This data is a clear signal that the government’s stimulus has been inadequate and needs bolstering – not windback.
“Every dollar we take away from the 1.7 million people on JobSeeker is a dollar we take away from hungry children, local businesses, and hospitality workers.”
Industry bodies are still calling for a permanent raise to the JobSeeker base rate, saying the current rate of $40 a day isn’t enough.
“JobSeeker isn’t just important during the pandemic – it is essential that people looking for work have time and security to find a job,” said Australian Council of Trade Unions president Michele O’Neil.
“The $40 a day rate of NewStart was a poverty trap so low that it stopped people having the resources they needed to survive while looking for work.”
The Australian Council of Social Services, Deloitte and Labor and the Greens have also been long-standing supporters of a raise to the rate.
“We cannot turn back to the brutality of leaving people without paid work to try to get by on just $40 per day – the old Newstart rate,” said ACOSS CEO Cassandra Goldie.
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