Coronavirus: Scott Morrison offers JobSeeker lifeline

The PM will extend JobSeeker payments at a reduced rate to the end of March, delivering a lifeline for 1.5m unemployed.

Scott Morrison at Parliament House in Canberra on Monday. Picture: Sean Davey.

Scott Morrison will extend JobSeeker coronavirus payments at a reduced rate to the end of March, delivering a pandemic lifeline for more than 1.5 million unemployed Australians.

The Australian understands cabinet’s expenditure review ­committee signed off last week on extending the coronavirus supplement payment beyond December 31, when it was due to expire.

The welfare payment boost is now expected to run in line with the JobKeeper wage subsidy program that ends on March 28 — but at a lower rate than the current $250 supplement and subject to final tick-off by cabinet.

It is understood that one ­tapered rate being considered was $150 a fortnight, with a final decision expected to be signed off on Monday night by cabinet.

The Prime Minister previously flagged an announcement on the coronavirus supplement before the end of the year, factoring in the ballooning jobless queue in Victoria triggered by the state’s four-month, second-wave lockdown.

The coronavirus payment, originally paid as a $550 fortnightly supplement to Jobseeker and Youth Allowance recipients, was scaled back to $250 between September 25 and December 31.

Labor, the Greens and welfare groups have been calling on the government to extend JobSeeker payments, and refrain from scaling back payments for unemployed Australians.

As the government moves to extend the program, The Australian can reveal almost 260,000 JobSeeker suspensions have been enforced in one month under ­mutual obligation rules that ­require unemployed Australians outside Victoria to actively seek work.

Since mutual obligation was ­reinstated on September 28, more than 234,000 jobseekers have had payments suspended for breaching rules, including refusing work and failing to agree to job plans, look for jobs and attend employment service provider appointments. The Australian under­stands the Morrison government is preparing to ­reimpose mutual obligation requirements in Victoria following Daniel Andrews’ decision to ­remove the “ring of steel”, separating Melbourne from the regions.

The number of jobseekers subject to mutual obligation rules, currently 950,654, will increase when unemployed Victorians are brought back in. Under current modified rules, jobseekers must apply for eight jobs a month.

Department of Social Services data shows more than 115,000 Australians moved off JobSeeker and Youth Allowance payments, since the May peak of 1.64 million, as states and territories lifted COVID-19 social and border ­restrictions. As of October 1, almost $14bn in coronavirus supplement payments had been paid to Australians, including $10.1bn to JobSeeker and Youth Allowance recipients.

In question time on Monday, Mr Morrison said Australia was on track to deliver on national ­cabinet’s three-step framework to reopen the economy by Christmas. “This government has put a lifeline out there to the Australian economy and it is now time, as we graduate from those lifeline ­measures, that we see our ­economy strengthen, recover what was lost and build for the ­future,” the Prime Minister said.

Under current JobSeeker ­arrangements, boosted by the coronavirus supplement, singles without any children can receive a maximum fortnightly payment of up to $815.70. Singles with children or those aged over 60 can receive up to $862, while Australians with partners are eligible for up to $760.80 each.

With the unemployment rate hitting 6.9 per cent in September, and the Reserve Bank and Treasury forecasting a peak of 8 per cent by the end of the year, ­Employment Minister Michaelia Cash said the government wanted “every jobseeker who can get a job, to get a job”.

“Since the height of the ­economy-wide lockdown in May, 446,500 Australians have returned to the workforce,” Senator Cash said. “Our economic revival depends on more Australians getting back to work.

“It is important that jobseekers are aware of their mutual obligations. These are important conditions to help support and encour­age job seekers to find new employment opportunities and get a job. Our focus will always be to get people off welfare and into work. Taxpayers expect nothing less. The Morrison government strongly believes that the best form of welfare is a job.”

While payment suspensions under mutual obligations do not typically result in a permanent ­financial penalty for jobactive participants, two people were deemed as being in the penalty zone as of October 31. Payment suspensions can be rectified if a jobseeker has a valid excuse. If a jobseeker has no valid reason for breaching mutual-­obligation rules, a demerit point is put against their name. Jobseekers need to receive more than three demerit points before facing a ­financial penalty.

The Morrison government has prioritised getting its JobMaker hiring credits legislation, a key budget measure providing wage subsidies for workers aged up to 35, through the Senate this week. Government Senate leader Simon Birmingham said the JobMaker scheme, which has been criticised by Labor, the Greens and One Nation, would help ­“create hundreds of thousands more jobs” across the economy.

Josh Frydenberg said JobMaker would support about 450,000 jobs. “That JobMaker hiring credit will see the government provide an incentive to businesses who take on people aged 16 to 35 who have previously been on JobSeeker,” he said. “If they’re 16 to 29, the business will get $200; if they are 30 to 35, the business will get $100 per week from the government in order to get those people into work.”

The RBA statement on monetary policy said last week the unemployment rate was likely to increase in the near term, “partly because some workers who withdrew from the labour force in the early months of the pandemic are expected to return, in response to improving job prospects in some areas and tightening eligibility ­requirements for JobSeeker”.

“The unemployment rate is expected to peak a little below 8 per cent around the end of the year,” the RBA said. “This peak represents a very high level of spare capacity in the labour market. The unemployment rate is expected to decline only gradually, to just above 6 per cent by the end of 2022.”