JobSeeker supplement to be extended until end of March

Unemployed Australians will have the temporary coronavirus supplement extended into next year at a reduced rate under a federal government decision to increase the $16.8 billion payment.

Prime Minister Scott Morrison confirmed on Tuesday the welfare supplement will continue until March in a boost for JobSeeker recipients and others on income support, ending weeks of doubt over whether the payments would end at Christmas as previously scheduled.

Mr Morrison and cabinet ministers made the decision on Monday night to extend the supplement for another three months, with the payment to fall from $250 to $150 per fortnight from January 1.

The Prime Minister said the extension will cost $3.2 billion over the three-month period, with the legislation for the change to be introduced later this week.

Social Services Minister Anne Ruston said most aspects of the COVID supplement and eligibility arrangements will be maintained during the extended period to allow more people to continue to access the payment. This includes allowing those on the dole to earn up to $300 and continue receiving benefits, and the elevated partner taper rate, allowing those whose partners earn up to $80,000 per year access to the payment.

"We will continue to monitor the economic conditions to make sure we strike the right balance between providing elevated levels of support for people who need it but at the same time creating incentives for people to reengage with the workforce," she said.

A woman in her 40s or 50s is now more likely to be unemployed than a man in his 20s, a new report from the Parliamentary Budget Office shows.Credit: Kate Geraghty

The continued payments delay a bigger decision on the permanent rate for the JobSeeker allowance, which offers $565.70 a fortnight.

Australian Council of Social Service chief Cassandra Goldie has been calling on the government to increase the base rate to keep families out of poverty, but ministers have pushed that decision to next year.

At the height of the pandemic the JobSeeker unemployment payment was effectively doubled by the coronavirus supplement, which began as a payment worth $550 per fortnight from April 27 for people on JobSeeker, Abstudy, Youth Allowance, Parenting Payment and other income support.

It was reduced to $250 per fortnight from September 25 until December 31, with no certainty over whether it would continue next year.

Labor social services spokeswoman Linda Burney said the base rate needed to increase, as she pointed to calls from ACOSS and the Business Council of Australia for the change.

"There needs to be a decision by this government. And I'm just astounded that they have not announced a permanent increase," Ms Burney told ABC Radio National on Tuesday.

with Fleta Page