Welfare’s billion dollar pandemic boost

The total cost of funding coronavirus supplement payments, tied to welfare schemes reached $42.3bn by the end of last year.

More than 90 per cent of the jobs lost during the pandemic have been regained. Picture: AFP

Almost $27bn in COVID-19 payments were made to Australians already on working-age welfare before the pandemic struck last March, according to new Department of Social Services figures.

Payments data obtained by The Australian showed that between April and December, about two-thirds of corona­virus supplement recipients were on working-age payments before the JobSeeker and JobKeeper schemes were established.

The total cost of funding coronavirus supplement payments, tied to welfare schemes — including JobSeeker, Parenting, Abstudy, Austudy and Youth Allowance — reached $42.3bn by the end of last year.

The analysis of COVID-19 welfare payments found a single dole recipient without children and no employment income would have been $9250 better off.

The Morrison government is close to finalising plans to permanently increase fortnightly dole payments ahead of the $150 JobSeeker coronavirus payments ceasing at the end of March.

As the number of people on JobSeeker and JobKeeper falls, Treasury and the Reserve Bank are hopeful of a faster employment recovery than first expected.

The figures come as Australian Bureau of Statistics statistics last week showed the economy added a further 30,000 jobs in January, which was enough to drive a the unemployment rate to 6.4 per cent from 6.6 per cent in December.

More than 90 per cent of the jobs lost have now been regained.

The DSS data showed at the pandemic peak in May, 2.2 million Australians received coronavirus supplement payments.

That number fell to 1.95 million welfare recipients last month.

Across 25 fortnights between last April and next month, when the supplement expires, a single dole recipient without children and no employment income would have received a total of $23,612.50. If that person were in private rental accommodation ­receiving Commonwealth Rent Assistance, the total amount would be $27,102.50.

The DSS analysis said without the pandemic supplement, which was $550 a fortnight between April and September and $250 ­between October and December, the same dole recipient would have received $14,362.50.

Almost 40 per cent of welfare recipients access rental assistance, which has a maximum rate of $139.60 a fortnight. JobSeeker recipients with children receive a higher base rate. All welfare recipients get the $8.80 a fortnight ­energy supplement.

Welfare and industry groups, the RBA and unions all back a permanent increase to the dole.

The Australian last week reported the government could legislate the increase as early as this week after the expenditure review committee met on Friday.

With mutual obligation being re-established to encourage welfare recipients to move into jobs, and data released this month showing more than double the amount of jobseekers exiting employment services programs than entering, Treasury secretary Steven Kennedy has expressed optimism “the recovery is locked-in”.

But Treasury also estimates around 100,000 JobKeeper recipients may still be working zero or very few hours by the end of March when the subsidy ends, and therefore most vulnerable.