The Jobkeeper and Jobseeker payments have supported many Australians doing it tough during this COVID-19 period. With the $550 fortnightly Jobseeker supplement added to the Newstart payment, welfare recipients had gone from receiving $574 to $1,100 per fortnight. In an effort to keep employers and employees connected, the Jobkeeper payment of $1,500 per fortnight is paid to existing employees by their employers who qualify for the scheme.
The increased support payments substantially improved people’s lives. Results from a survey done by the Australian Council of Social Services (ACOSS) reveal that:
80.8% of recipients were eating better and more regularly
70.7% were caught up on bills
67.8% could pay for medicines and health treatments
58.8% found it easier to pay rent, or could move into better and safer accommodation
56.2% paid off debts
51.7% could save for emergencies
51.6% could purchase major household items (e.g. white goods)
26% were able to pay for studying/training
Despite the overwhelming positive impact of the increased payments and calls from the community sector to keep the current rate, Jobkeeper and Jobseeker payments have been cut. With grim unemployment predictions, ongoing border closures, Victoria in lockdown, and a recession, cutting these payments will send thousands of Australians into financial and housing stress, and potentially homelessness for the first time.
What are the cuts?
On September 25 Jobseeker was reduced from $550 per fortnight to $250 per fortnight, bringing the total payment down to $815 per fortnight. The supplement is due to be reviewed before December 2020, and it is unlikely to continue into 2021.
The changes to Jobkeeper are slightly more complex. From September 28:
Full time workers (those working more than 20 hours per week) payments fell from $1,500 to $1200 per fortnight
People working less than 20 hours started to receive $750 per fortnight.
For the first three months of 2021 payments fall again, down to $1,000 for full time workers, and $650 for those working less than 20 hours per fortnight
More than 5 million Australians are being supported by either the Jobkeeper or Jobseeker payments. But with significant cuts, these payments have now fallen below the poverty line, potentially pushing 650,000 people, including 120,000 children into poverty.
Why the rate should be raised
1. Welfare payments have historically been low
Calls to raise the rate of welfare payments started well before COVID-19. The Raise the Rate campaign and the Australian Unemployed Workers Union have been campaigning to increase welfare payments, and to abolish the punitive mutual obligations agreements, to ensure those who need help are supported.
Before the Jobseeker supplement the Newstart payment of $287 per week was so far below the poverty line that even the proposed increase of $75 per week would still force 500,00 Australians into poverty. The allowance had not risen in real terms since 1996, despite the cost of living skyrocketing, leaving many recipients to chose between paying rent and eating three meals a day.
The COVID-19 pandemic has forced governments to support vulnerable members of our community, but it shouldn’t take a global pandemic to ensure people can get the help they need.
In the same survey by ACOSS, the cuts to the Jobseeker payment was predicted to have a devastating impact on people:
80% said they would have to skip meals and reduce amount of fresh food they buy
Over half said the cut would make it harder to pay rent
56% said it would be harder to pay bills, and would have to forego some essentials
47% will have to skip medicines or ration their doses
40% said they will have less than $14 a day after paying their rent
We need to make sure no one gets left behind as we recover from the financial shock of COVID-19. Rather than returning to the unacceptably low Newstart payments, enough financial support needs to be given to ensure unemployed Australians live with dignity.
2. There are no jobs
With many industries still restricted and working from home measures ongoing, getting paid work is incredibly difficult. Unemployment is still sitting at close to 7%, there’s been no increase in hours worked and 1.7% of all employed people are currently working 0 hours.
The unemployment rate was reported to have fallen from 7.5% to 6.8% in August, but:
People receiving Jobkeeper are considered employed
Many people aren’t looking for work because there isn’t any, and are therefore not considered unemployed
Many people are under-employed, previously holding full time positions before COVID-19
Considering these factors, the unemployment rate is actually close to 13%. Moreover, in the National Skills Commission’s Vacancy report for July 2020, recruitment activity stands at 77.9% of pre-COVID levels (down by 37,100 job ads). Subsequently, Victoria recorded the strongest fall in job ads throughout 2020, down by 40.8% or 18,900 ads.
We know there are more jobseekers than there are jobs. An ad for a dishwashing job in Sydney recently received 6,190 applications. These numbers are similar for other entry level jobs advertised on the Jobseeker platform:
From Monday 28 September, jobseekers will be required to search for up to 8 jobs a month to continue to receive welfare payments. This arrangement known as mutual obligations, has been a heavily critiqued aspect of Australia’s welfare system. When mutual obligations were suspended, the Australian Unemployed Workers Union received numerous reports from jobseekers that they felt properly quipped to look for work for the first time, without the penalties for not applying for jobs.
Instead of punishing people for being out of work, we need a system that supports those doing it tough, now more than ever.
3. Increasing welfare payments helps stimulate the economy
Many economists have said that keeping the rates for Jobkeeper and Jobseeker will help Australia out of the biggest recession for almost a century. Payments have helped people in or at risk of falling into poverty because of the lack of work establish a level of financial security that supports their dignity and livelihood.
The COVID supplements lifted many Australians out of poverty for the first time. In turn, this increased consumption and has had a positive impact on the Australian economy, with an extra $663 million in cash being spent, helping small businesses stay afloat, subsequently allowing people to continue to pay rent and meet mortgage repayments.
How you can help
We still have a long way to go until we see the end of COVID-19 and the economic crisis that has occurred as a result. We must support the thousands of Australians who, because of these cuts, are now forced to choose again between paying rent and putting food on the table. With mutual obligations also reintroduced at the same time as these cuts, the campaign to raise the rate is now more important than ever.
If you think the rate should be raised for good, take action with the raise the rate campaign.
If you’re a welfare recipient, you can join the Australian Unemployed Workers Union who will support you to learn about you rights in relation to mutual obligations.
If you’re employed and still want to help, you can sign up as a solidarity member with the Australian Unemployed Workers Union.
ACOSS, 2020 ‘If it wasn’t for the Supplement I’ve no idea where I’d be’, survey of more than 600 people receiving the new rate of Jobseeker or related income support payments', viewed 11 September 2020, retrieved from: https://www.acoss.org.au/wp-content/uploads/2020/09/If-It-Wasnt-For-The-Supplement-I-Dont-Know-Where-Id-Be-August-2020-JobSeeker-Survey.pdf
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Australian Unemployed Workers Union, 2020 ‘Senator Cash recklessly forces Jobseekers back into harmful Jobactive system’, viewed September 18 2020, retrieved from: https://auwu.substack.com/p/senator-cash-recklessly-forces-jobseekers
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