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What is JobSeeker Payment?
JobSeeker Payment is the main income support payment for people without any or enough paid work between 22 years old and Age Pension age. JobSeeker was previously known as the Newstart Allowance.
How many people receive JobSeeker?
As at September 2022, there were 772,000 people on the JobSeeker Payment and about 250,000 people receiving Youth Allowance. Of people receiving JobSeeker Payment:
- 51% are 45 years or older
- 43% have a disability or illness that prevents them from being able to work full time
- 80% have had to rely on income support for over 12 months.
How much do people on Jobseeker payment receive now?
At September 2022, Jobseeker Payment plus the Energy Supplement added up to $338.60 a week or around $50 a day.
What is ACOSS calling for?
ACOSS is calling for a permanent and adequate increase to JobSeeker, Youth Allowance, Austudy, Abstudy, Special Benefit and Parenting Payment.
JobSeeker and these other payments should increase to at least $76 a day (the Age Pension rate).
In addition to the base rate increase, there should be supplementary payments paid to people with disability and illness and single parents that reflect the additional costs they face. Commonwealth Rent Assistance should also be increased by 50%.
People receiving JobSeeker and other income support payments already receive supplementary payments, so why should we increase payments?
The only supplementary payment that everyone on JobSeeker Payment receives is the Energy Supplement of $4.40pw. Even with this payment, JobSeeker is just $50 a day.
The second most common payment is Commonwealth Rent Assistance, which is a payment available to people receiving income support who rent privately or live in community housing. Just 38% of people on JobSeeker receive Commonwealth Rent Assistance. The maximum rate of this payment is $73pw for a single person. However, to receive this, you must pay more than twice that amount ($168pw) in rent.
Parents may receive Family Tax Benefit if they have dependent children. Just 19% of people receiving JobSeeker Payment receive Family Tax Benefit, which is to assist with the cost of raising children.
Won’t increasing the rate of JobSeeker act as a disincentive to finding a job?
Ensuring income support payments are adequate to cover the basics will not act as a disincentive to employment.
Jobseeker is much lower than the minimum wage
At present, JobSeeker Payment is just 42% of the minimum wage. If JobSeeker was permanently lifted to $76 a day, it would be less than two-thirds of the minimum wage. This means that people will still be better off financially in paid work.
Professor Jeff Borland conducted research on the effect of higher income support payments on the take-up of paid work among people on JobSeeker Payment when they received the Coronavirus Supplement. He found there was no discernible effect on movement into paid work, which was on par with what it was pre-pandemic.
The inadequate rate of JobSeeker Payment acts as a barrier to getting paid work
The low rate of income support creates a barrier to paid work because the constant financial stress people on JobSeeker face as well as the inability to pay for healthcare and medicine harms their mental and physical health. JobSeeker Payment is so low at $50 a day that people are unable to pay rent and bills or cover the cost of fresh food. Buying petrol or fixing the car is nearly impossible, as is buying suitable clothing for a job interview or even getting a haircut.
An adequate rate of JobSeeker and other income support payments will help people cover the basics while they reskill, care for children, study, or search for paid work.
Do you advocate for pensioners?
While the Raise the Rate for Good Campaign is focused on increasing base rates of JobSeeker, Youth Allowance, Austudy, Abstudy, and the Parenting Payment, ACOSS is also calling for supplementary payments that would extend to pensioners, including higher rates of Commonwealth Rent Assistance, and a Disability and Illness Supplement of at least $50pw.
What is indexation?
Indexation is a technique used by the Federal Government to adjust the level of income support payments so that they increase in line with inflation (the general level of prices for goods and services), or, for pension payments, average wage increases where these exceed the increase in inflation. JobSeeker is indexed twice per year, but only in line with the Consumer Price Index (inflation). Youth Allowance and Austudy is only increased once per year in line with the Consumer Price Index.
When you say, ‘JobSeeker has not increased in real terms’ what does this mean?
A ‘real increase’ is an increase over and above inflation. As mentioned, JobSeeker and related payments have been increasing over time to reflect changes in inflation. A real increase would deliver a rise above inflation.
Why does this matter for the rate of JobSeeker and other payments?
JobSeeker and related payments have long been inadequate. Increasing payments in line with the Consumer Price Index (CPI) does not address this inadequacy; it merely means payments don’t become even more inadequate (to a degree – more on this below).
Pensions are indexed in line with wages as well as CPI, which means that pensions maintain pace with broader community living standards, which are guided by wage growth. This has also seen the gap between pension and non-pension payments grow substantially. The pension was only about $20 pw higher than the unemployment payment in the early 1990s. It is now $175pw higher.
CPI reflects the average price of an average basket of goods. We know that people on low incomes have very different spending patterns to people on higher incomes, and so CPI does not necessarily reflect the average basket of goods bought by someone on JobSeeker, as it would someone on a wage of $90,000 (for example).
The second reason why CPI on its own is not a great way to ensure income support payments cover living costs over time is that it does not measure community living standards. For example, in 1994, not everyone would have had a mobile phone but these days they are almost essential. Adjusting incomes in line with price changes does not reflect changes to the norm. This is why ACOSS is calling for payments to be indexed in line with wages as well as prices, to ensure that incomes maintain pace with community living standards over time.