JobSeeker, Youth Allowance and Austudy to see fortnightly payment increase

Some good news amid the struggle for the 700,000 Australians on JobSeeker: the government has agreed to “raise the rate” and will pay recipients an extra $40 a fortnight. The payment of $691.30 a fortnight will go up to $731.30, an increase of 5.7%, lifting the payment closer to — but still not above — the poverty line.

The benefit also goes to the 200,000 Australians on Youth Allowance and the 35,000 on Austudy. The higher rate will commence on September 20 after legislation passes Parliament, with the cost amounting to $4.9 billion over five years.

Extra boost

But that’s not all. Those aged over 55 will benefit from additional JobSeeker payments, receiving a total of $785.20 — a combination of the $40 bonus and the higher rate once reserved for recipients aged over 60, a bump of more than 13%.

Treasurer Jim Chalmers explained the rationale by referencing the disadvantage faced by older JobSeeker recipients.

“The majority of people aged 55 and over on JobSeeker are women, many with little to no savings or superannuation, and who are at risk of homelessness,” said the treasurer. “The government is committed to a fairer, more inclusive society.”

The new JobSeeker rate is still low enough that most recipients will remain below the poverty line. But not all — some recipients have a combination of welfare payments and earnings, which can lift them above the threshold.

The intention is that JobSeeker should not be snatched away just because a person makes a little bit of money from employment. (As the name implies, the payment is meant to encourage work, not discourage it!)

About 20% of JobSeeker recipients also make money in the market economy, with most making more than $250 a fortnight. The payment fades slowly as each dollar is earned, so nobody is ever worse off for having worked.

The result is that many people on unemployment benefits are not in fact unemployed — equally, many people who are unemployed are not on unemployment benefits.

More JobSeeker recipients

The irony of the JobSeeker payment is that there are more recipients now than in the year before the pandemic, despite Australia’s ultra-low unemployment rate and the fact there is effectively a job vacancy for every unemployed person in Australia.

Applying for JobSeeker was made easier by additional payments made available during the pandemic and the loosened eligibility, with recipients ballooning from 700,000 to well over 1 million. Most people who began receiving the payment during the pandemic have since transitioned off it, but some have not — as of late 2022, there were more recipients than in late 2019. That means increasing JobSeeker now is actually more expensive than it would have been in 2019.

As the unemployment rate is due to rise over the next two years, from 3.5% to 4.5%, the number of JobSeeker recipients is sure to rise as well. However, the government will also be moving some people off JobSeeker and onto the new single-parenting payment.