A panel of experts established by the Government has recommended a “substantial increase” in the rate of the JobSeeker unemployment payment and related payments.
It also recommended the Government increase financial assistance to renters.
The Government is set to reject the recommendation to increase JobSeeker in its upcoming Budget, warning “we can’t fund every good idea”.
Background
Last year, the Government agreed to a request from Senator David Pocock to set up an expert panel to advise on how to address economic disadvantage ahead of every annual budget.
This includes an assessment of whether support payments like JobSeeker are adequate. The panel’s recommendations are not binding but must be made public.
JobSeeker
The JobSeeker unemployment benefit is automatically updated twice a year to match rising prices.
However, the payments have not permanently increased above inflation for over two decades. This has seen the payments fall behind compared to the incomes of employed people and relative to most measures of poverty.
The current rate of JobSeeker for a single person with no children is $693.10 a fortnight. About a million people receive JobSeeker or a similar payment.
Experts call for a raise
The expert panel has recommended a “substantial increase” in the payments “as a first priority”.
The panel noted the one million people who receive these payments “face the highest levels of financial stress in Australia”.
“All indicators… show current rates of these payments are seriously inadequate.”
Rent assistance
The panel also called for an increase to Commonwealth Rent Assistance. That’s an additional payment for welfare recipients (including those on JobSeeker or the Age Pension) who rent, reflecting the additional financial pressures on renters.
Under current rates, a single person on JobSeeker with fortnightly rent over $350 receives about $150 a fortnight.
This amount has not kept up with rising rents over the last two decades and the panel noted recipients faced additional risks of financial stress.
Government response
The Government will deliver its next Budget on 9 May. It is set to reject the recommendation to increase JobSeeker because of the cost to the budget.
Government modelling suggests an increase on the scale recommended by the panel would cost the Budget about $6 billion a year over the next four years. The current cost of JobSeeker is about $11 billion a year.
The Government is likely to adopt some other, less costly recommendations. It has not confirmed a position on raising Commonwealth Rent Assistance, which would likely cost about $200 million a year depending on the size of the increase.
