Tuesday, 23 February 2021
Questions without Notice
My question is to the Minister for Families and Social Services, Senator Ruston. Can the minister advise the Senate on the changes to working age payments announced today? How they will benefit 1.95 million Australians who are currently receiving working age payments?
I thank Senator O'Sullivan for his question. The pandemic, as we all know, caused a once in a lifetime disruption to our labour market and we used our comprehensive welfare system to support Australians who found themselves unemployed through the emergency support measures that were put in place last year. Today we announced the transition from those temporary measures into a more permanent setting.
We know that the recovery of the Australian economy is now well underway, so we no longer are relying on those temporary supports which have sustained us over the last 12 months. On 31 March, the coronavirus supplement and associated measures will come to an end. In its place, in recognition that the Australian economy has changed as a result of the pandemic that has impacted our country over the last 12 months, we are seeking to increase the working age payments base rate permanently by an amount of $50 per fortnight per payment. This is the single largest increase in working age payments, or unemployment benefits, since 1986—that is, it will be a 9.7 per cent increase, year on year, from April 2020 to April 2021.
In addition to increasing the payment rate, we will also be increasing the income-free area to $150. This means every Australian on working age payments will be able to keep the first $150 that they earn in a fortnight before their payment is reduced by one cent. What we are seeking to do here is to get the balance right between supporting people as they look for work but also making sure that we put the right incentives in place for people to take up work. We also seek to remove the disincentives that are put in place for people to not take a job. This is a $9 billion investment in working age payments, and it is absolutely essential that we continue to support our working age payment recipients.
Thank you, Senator O'Sullivan. The Morrison government's priority is giving people the support they need to get them into work. That is why we've made the decision today to increase the income-free area to $150 per fortnight. As I said, this means that a recipient can earn $150 without losing a cent of their payment. The income-free area will allow people to work about a day a fortnight at the minimum wage before their payments are reduced.
During the pandemic we saw temporary settings, including the income free area that was increased, deliver very positive results, with a significant increase in the number of people who were reporting earnings. And we know that people who report earnings are twice as likely to transition off payment than those that don't report any earnings at all. So we will continue to support and we are confident that we will be able, through this measure, to get people off payment and into work, because we know that getting people off welfare is important.
In addition to the ongoing measures that were announced this morning and the measures that Senator Cash also announced this morning, we are also seeking for this parliament, over the coming weeks, to agree to the temporary extension of the ordinary waiting period, which is a one-week period that people normally have to serve before coming on to payment, to make sure that we continue to give direct and immediate access to anybody who's coming on to payments, because we know that localised outbreaks are still, potentially, a risk to this country.
We know also that there are likely to be people who are going to have to isolate because they have contracted coronavirus or are caring for somebody and are required to isolate. So we will also be seeking, in this place, to extend the provision to enable people under those provisions to continue to be able to get access to payment, as long as they meet the existing eligibility criteria. But, we know, 93 per cent of people have got their jobs back, so we look forward— (Time expired)