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Millions face income losses as JobSeeker supplement reduced and anxiety about future remains

Today’s decision to reduce the JobSeeker supplement will have a severe impact on millions of people, whose lives have been turned upside down by this pandemic, without providing any certainty about the future payment rate.

Responding to the announcement today regarding the future of the JobSeeker Payment, ACOSS CEO Dr Cassandra Goldie said: “The decision to reduce the JobSeeker Payment in September will hurt millions of people just keeping their heads above water. It means from 25 September, a person on JobSeeker will lose $300 per fortnight or $150 per week, and face the prospect of a further cut just after Christmas. People need financial security and certainty at this anxious time. Today’s announcement gives them neither.

“The full supplement should be maintained until it is replaced with a permanent, adequate increase. Instead, the Coronavirus Supplement has been extended only to 31 December, with people facing the prospect of returning to $40 a day on New Year’s Day.
“While we note that the Prime Minister said today the supplement may be extended beyond the end of the year, what we needed from the Government today was an adequate, permanent fix to income support, not a temporary, lowered extension. The Government needs to give people and businesses confidence for the long haul.

“This decision will also have flow-on effects across the entire economy. Millions of people will have less to spend on the essentials in local businesses, which in turn could lead to further economic pain and unemployment.

“The Government’s decision is out of touch with the broad support across business, unions and the community for an adequate level of income support, set permanently – we need a guarantee we will never go back to $40 a day. We thank everyone who has shared their first-hand experience of the brutality of trying to survive on so little. The Government has again today acknowledged $40 per day is completely inadequate, although it has not guaranteed never going back there. We are determined to keep working together to secure an adequate level of income support, put in place permanently.

“While the relaxation of JobSeeker income tests is welcome, it will provide little benefit while jobs are scarce, with 13 people on JobSeeker for every job available and many more applying.

“We strongly urge the Government to today rule out any plans to bring forward income tax cuts. These cuts would mainly benefit people earning more than $100,000 per year, doing nothing to help the millions in desperate financial need. Their economic impact would be minimal, as evidence from the last round of cuts showed, with the dollars largely saved not spent.

“Any decision to reduce support to people without paid work while increasing it for those on higher incomes at this critical time would be deeply disappointing.”

On the changes announced to JobKeeper, Dr Goldie said: “We welcome the extension of JobKeeper beyond September, and urge the Government to take a flexible approach to its end date. Our view is that wage subsidies should continue for as long as they are needed for those organisations and businesses that can demonstrate the need for ongoing support.

“In principle, the targeting of JobKeeper to organisations and companies experiencing ongoing hardship as a result of the pandemic is sensible. But the policy needs to be very carefully calibrated to manage the economic and social impacts of the adjustment, noting we are in very uncertain times right now.

“The Government must ensure that it meets the needs of different parts of the economy, and we welcome the extension of current arrangements for the community services sector. The Government should also provide a targeted support package to the community sector to meet increased demand for some services, reduced donations and necessary service adaptations.

“The reduction in the full time rate of Jobkeeper after September is of concern, especially given the cut to the Jobseeker payment.

“We are very disappointed that today’s announcement has not closed the gaps in the scheme which have left temporary migrants in desperate circumstances, without access to JobKeeper, JobSeeker or Medicare.

“In addition to adequate income support, people who have lost their jobs also need a range of other supports to help them secure work as the economy recovers, including career advice and training.”

Detail of JobSeeker changes:

  • The JobSeeker supplement (coronavirus supplement) will be reduced from $550 per fortnight to $250 per fortnight.
  • This will take the daily payment rate to $59pd (down from $80) and take the weekly payment for JobSeeker (single) to $412pw (including $4.40pw Energy Supplement).
  • The income test will increase from $106 per fortnight to $300 per fortnight (Youth Allowance test will also go to $300pf).
  • The asset test and Liquid Assets Waiting Period will return from 25 September.
  • Treasury forecasts 2.3 million people to receive Coronavirus Supplement by September.
  • The partner income test cut-out will increase to $3,086.11 per fortnight, or $80,238.89 per annum, for individuals with no personal income, from 25 September 2020. The taper rate will increase from 25 cents to 27 cents, with the higher income cut-out a result of changes to income testing for JobSeeker Payment.
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