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REVEALED: New JobSeeker rate for 1.95 million Australians

Lucy Dean
·8-min read
Scott Morrison, Australian cash, pedestrians.
The increase is $3.57 a day. Images: Getty

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  • The base JobSeeker rate will increase by $3.57 a day or $50 a fortnight.

  • Unemployed Australians will need to increase their job searches from eight to 20 a month.

  • A new hotline will be formed for employers to 'report' JobSeeker recipients who refuse work.

Australians receiving the base JobSeeker unemployment payment will receive an extra $50 a fortnight or $3.57 a day under the new permanent rate unveiled by the Government on Tuesday.

The new permanent rate will begin on 1 April, following the conclusion of the Coronavirus Supplement at the end of March. Around 1.95 million Australians on JobSeeker and other working-age payments are expected to receive the new rate, Social Services Minister Anne Ruston said. 

That takes the new rate to $615.70 a fortnight, or $43.98 a day. The increase is expected to be accompanied by tougher mutual obligations requirements.

"This is the single largest increase to the JobSeeker payment since the mid-80s," Prime Minister Scott Morrison said on Tuesday. 

That places JobSeeker at 41.2 per cent of the national minimum wage and will cost $9 billion. 

Employers to 'report' JobSeekers for failure to accept employment

Employment minister Michaelia Cash also announced an overhaul to the mutual obligations system. 

Employers who offer work to qualified JobSeeker recipients will be able to contact an "employer reporting line" should that JobSeeker recipient refuse the job. 

"You often hear... employers saying, 'Joe applied for a job. He was qualified for the job.. but they said no,'" Cash said.

Under the new reporting line, the Department of Social Services will follow up with the job seeker and if they do not have a valid reason for refusing work, will face penalties. 

Australians on JobSeeker will also be required to attend face-to-face appointments with job providers. This was temporarily paused during the COVID-19 pandemic, and will also have to increase their job applications from eight to 15 a month. Then, from July, JobSeeker recipients will need to make 20 applications a month. 

People who have been on the payment for six months will also be required to enter into an "intensive training stage".

"In other words, we're going to give them the best chance they can to do a short course to enhance their skills or to do some work experience," Cash said.

"This is all about acknowledging that, if I am receiving welfare, I have obligations to do everything I can to get into a job. But this is also the government's commitment to all Australians. The best form of welfare is a job, and we will do everything that we can to move people from welfare into work," she said. 

The Government will also increase its audits on job providers.

The earnings threshold before JobSeeker payments begin to reduce will also be increased by $150.

How does the new JobSeeker compare to the old rate?

Prior to the COVID-19 pandemic, JobSeeker payments were $565.70 a fortnight for single recipients with no children.

That equated to $40.40 per day. That’s around two thirds of the aged pension, or 40 per cent of the minimum wage.

A survey from Anglicare Australia found that this old rate left some 41 per cent of recipients with as little as $7 a day after meeting rent payments.

At the height of the pandemic, the Government introduced the $550 Coronavirus Supplement which essentially doubled the payments to $1,115.70 a fortnight, or $79.70 a day.

That boost saw the number of people left with $7 a day fall to 18 per cent.

The Supplement has gradually been reduced since September last year, and is now $150 a fortnight.

That means that combined, single JobSeeker recipients with no children are currently receiving $715.70 a fortnight, or $51.12 a day.

How does the new JobSeeker compare to expectations?

While this marks an increase to the permanent rate, today’s announcement has left the welfare lobby, the federal opposition and business community unimpressed.

Unemployed workers’ representatives

The Australian Unemployed Workers’ Union (AUWU), which has been calling for the rate to be increased to $80 a day, described the new rate as the work of a “government poverty machine”.

“We will not go quietly. It is our voices that must be heard,” the AUWU said in a statement.

The poverty line sits at $832 a fortnight, or $59.43 a day, according to the Australian National University.

The Australian Council of Social Services has also warned the Government needs to do more to stop vulnerable people from falling even further behind.

It’s been calling for a new base rate of $65 a day, and noted that the Coronavirus Supplement meant many Australians could afford to cover their bills for the first time.

However, the gradual erosion of the Supplement has forced them back into precarious situations.

“At $51 a day with the current Coronavirus Supplement, people on JobSeeker are being forced to make impossible decisions, choosing between housing, food, medications, basic toiletries and paying bills,” CEO Dr Cassandra Goldie said on Tuesday.

“The Government’s decision will impact millions who have the least, including hundreds of thousands of children whose parents are locked out of paid work, people with a disability, students, older workers, people with a chronic illness, single parents, people from all walks of life.”

A study from the National Council of Single Mothers found the temporarily increased JobSeeker had allowed nearly seven-in-10 families to purchase healthier foods.

GetUp described today's announcement as a "half-arsed PR move".

"The Morrison Government has thrown people on JobSeeker some crumbs and called it a raise. What it really is is an insult," national director Paul Oosting. 

Economists

A survey of 45 of Australia’s leading economists performed by The Conversation in November last year found that only four believed the previous settings were appropriate. Another four believed that an increase of $0 to $100 a fortnight would be appropriate.

However, the rest believed the Government needed to invest significantly more into the JobSeeker scheme.

Thirteen called for an increase of $100 to $200 a fortnight, and 17 said it needed to jump by $200 to $300 a fortnight. And another seven called for an extra $300 a fortnight, if not more.

Image via The Conversation.
Image via The Conversation.

An increase of around $300 a fortnight would take the JobSeeker rate closer to the age pension, and 50 per cent of median income.

More recently, NAB chief economist Alan Oster said a higher JobSeeker has delivered “tremendous benefits” to the Australian economy.

He noted that not only did it help families, the majority of money injected into JobSeeker flowed straight back into the economy, with Australians choosing to spend, rather than save it.

The Reserve Bank of Australia governor Philip Lowe has also voiced strong support for a higher JobSeeker.

“The issue of the rate at which we assist people who are on unemployment [benefits], it is relevant to the economic questions we face,” Lowe said.

“It affects labour supply, it affects spending in the economy. And the way that we assist unemployed people affects the way they participate in the society and the economic system.”

An interim report from a Senate inquiry on the response to the pandemic in 2020 also found the Government needed to legislate an increase.

“It has been widely acknowledged for years, by business and community stakeholders alike that the permanent rate of JobSeeker at $40 a day is totally inadequate, often forcing recipients to live well below the poverty line.

“The committee agrees that the original rate of JobSeeker is inadequate,” the report read.

Business

The Business Council of Australia has also thrown its support behind a significantly larger JobSeeker, calling for it to be benchmarked at 75-90 per cent of the age pension.

With the maximum basic rate for the pension at $860.60 for a single person, that would mean a JobSeeker set between $645.45 to $774.54, or $46 to $55 a day.

“To support unemployed Australians and ensure nobody gets left behind, the rate of

JobSeeker should be set at levels more consistent with historical relativities with the Age Pension,” it said in its budget submission.

“A JobSeeker rate in this range (which is around 50 per cent of the minimum wage) would address the need to preserve incentives to work while improving the adequacy of the payment.”

Image via Business Council of Australia
Image via Business Council of Australia

The Government’s decision today also comes amid new data from Deloitte Access Economics showing a more significant, $80 fortnightly increase, could be delivered for $2.7 billion a year and $7.5 billion over the coming three years as unemployed Australians return to work.

A larger, $160-a-fortnight increase would set the budget back around $5.4 billion in 2021 and $15 billion over the years to the 2023-34 financial year, the Sydney Morning Herald reported.

Image: Yahoo Finance
Image: Yahoo Finance