The government’s decision to end Covid disaster payments once states reach the 80% vaccination mark has been slammed as “unconscionable” by welfare groups, as states indicate “targeted” support will remain in place for businesses.
Australian Council of Social Services chief executive Cassandra Goldie said the “snap decision” would hurt people on lowest incomes the most, as she urged a lift to the base rate of all welfare payments.
“It is unconscionable to use broad vaccination rate data as the mechanism to cut off income support to people without paid work, regardless of whether a lockdown has lifted or what the actual vaccination rates are for a range of at-risk groups,” Goldie said.
“The last thing we should be doing is cutting off income supports, economic supports, that have been so crucial for the people who are fortunate enough to be eligible for them.”
Acoss also warned that people on temporary visas who had been eligible for the payment would be left with no income at all as they could not apply for the JobSeeker payment.
The NSW premier, Gladys Berejiklian, said she was confident there would be strong demand for workers once lockdowns eased, despite many businesses not operating at capacity.
“We are getting good feedback on the likely pent-up demand there is and people will be out over-patronising in midweek than what previously occurred,” she said.
She said the NSW treasurer, Dominic Perrottet, was in talks with the federal treasurer Josh Frydenberg about maintaining a level of support for business, which has been co-funded with the states.
“I suspect we will have a much more targeted approach because the business community is so diverse, businesses range in size and what they are doing and some weathered the storm really well and have done really well and others haven’t.”
The ACT chief minister, Andrew Barr, said the gradual tapering of the disaster payments “aligns with the ACT’s pathway forward” out of lockdown on 15 October because the additional two weeks of payment after the 80% threshold is reached “will ensure that the month of October is covered” before a further big easing of restrictions on 29 October.
Barr noted people out of work are eligible for the normal safety net of jobseeker.
He said he had reached in-principle agreement with Frydenberg for the extension of ACT business support grants, with a joint announcement expected on Thursday.
The shadow treasurer, Jim Chalmers, said he was concerned the payment would be ended prematurely.
“I think a lot of people are still doing it tough and they still need a bit of help. What we’ve said all along, is we understand that these payments can’t go on forever but they need to be tailored to what actually is going on in the economy,” Chalmers said.
On Wednesday the government announced that after paying out more than $9bn in disaster payments to 2.16 million people since June, they would begin to wind up the payments once vaccination rates reach 70% of the adult population.
At the 70% mark, the payment will stop being renewed automatically, and workers will need to reapply for the payment to confirm their eligibility, provided they live in an area that remains a commonwealth-declared hotspot.
But once a state or territory reaches 80% full vaccination of its over-16 population, the payment will step down over two weeks before ending, and no new applications will be allowed, even if an area goes back into lockdown.
Frydenberg said winding up the payment was in line with easing restrictions as outlined in the plan signed off by national cabinet.
“As I have said before we can’t eliminate the virus, we need to learn to live with it in a Covid safe way. This means we must ease restrictions as vaccination rates hit 70-80% in accordance with the plan agreed at national cabinet,” Frydenberg said in a statement.
“As restrictions ease the economy is well-positioned to bounce back. Today’s announcement about the winding down of the Covid disaster payment will provide businesses and households with the certainty they need to plan for the future.”
The treasurer said the federal government was continuing to work with locked-down states and territories on how business support payments would also begin to taper off once vaccination rates hit 70%. The government would have “more to say shortly” on that.
The return to pre-pandemic level income support payments, which will kick in two weeks after a state reaches the 80% vaccination rate, will see payments dramatically reduced for those out of work.
Under the Covid disaster payment, eligible recipients have received $750 a week if they lost more than 20 hours of work; $450 a week if they lost between eight and 20 hours; and $200 a week for those on income support payments who lost over eight hours of work.
Email: sign up for our daily morning briefing newsletter
In the first week after a state or territory has reached 80% vaccination, there will be a flat payment of $450 for those who have lost more than eight hours of work, while those on income support will receive $100.
In the second week, the payment will be brought into line with jobseeker at $320 for the week for those who have lost more than eight hours of work, while the payment will end for those on income support.
The government says for those who haven’t already returned to the workforce following the end of the temporary payment as the economy opens up, “the social security system will support eligible individuals back into work”.
According to the latest figures from Services Australia, 2.16 million people have received at least one Covid disaster payment, with 3.63 million claims resulting in $9.02bn in payments.
About 225,000 people on income support have claimed a $200 income support payment totalling $172m, while about $100m has been paid in pandemic leave disaster payments.
The latter payment, which provides paid leave to people who have to self-isolate, quarantine or care, will remain in place until June 2022.
More than a million people in NSW have received at least one disaster payment, with a total of $6.13bn paid out in that state alone, with payments costing about $600m a week.