News Australia’s jobless on the edge of financial abyss as JobSeeker payments slashed

Australia’s jobless on the edge of financial abyss as JobSeeker payments slashed

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A day of financial reckoning has arrived for 1.6 million Australians as JobSeeker rates are slashed, and many risk being penalised further due to confusing new rules which people are struggling to decipher.

“It’s extremely alarming how little communication has gone out and how unclear it is,” Kristin O’Connell, of the Australian Unemployed Workers Union, told The New Daily.

From Friday, the coronavirus supplement will be reduced from $550 to just $250 a fortnight, leaving people on the Centrelink welfare payment with a $150 hole in their budgets each week.

From Monday, mutual obligations – tasks which recipients must do or risk losing their payments – will resume after being paused.

During this time, people could engage with job providers voluntarily but were not penalised for not doing so.

The reduced coronavirus supplement runs until December 31, when recipients will return to the $40 a day allowance of the original payment.

People are seen in long queues outside the Centrelink office in Southport on the Gold Coast, Monday, March 23, 2020. Centrelink offices around Australia have been inundated with people attempting to register for JobSeeker.
800,000 more people are on JobKeeper now than pre-pandemic. Photo: AAP

Economists, social advocates and politicians from all sides have pleaded with the government not to slash the rate during the pandemic.

They’ve pointed to soaring unemployment rates, lack of jobs in the market, and the financial hit to the national economy.

Advocates also fear the ending of eviction moratoriums, with some tenants to face paying back outstanding rent – or being kicked out.

Meanwhile, with JobKeeper splitting into a two-tier system and eligibility rules changing from Monday, economists predict jobs will be lost and even more Australians will be forced into Centrelink queues.

Ms O’Connell, the AUWU’s communications coordinator, said the impact of all these changes happening at once can lead to confusion, and potentially penalise vulnerable people for missing their obligations.

An extra 800,000 people started receiving JobSeeker in the early stages of the pandemic, with 1.62 million on the payment as of July this year.

Ms O’Connell said she worried about how hundreds of thousands of people would handle the mandatory mutual obligations system for the first time, claiming little information had been shared by Centrelink or the employment department.

“Some will understand mutual obligations, but many aren’t familiar with it. Even if they were trying to engage with a job agency before, if they made a mistake, they wouldn’t be penalised. We don’t know if that will change,” she said.

“They need to give people clear information.”

The AUWU has asked Scott Morrison to delay JobSeeker changes. Photo: AAP

Advisories posted on the Services Australia website state mutual obligation requirements “may apply to” recipients, and recommended people speak to job providers for specifics.

The department warned, “we may suspend your payment” if obligations weren’t met.

“You must do [mutual obligations] from 28 September 2020,” the website stated, noting recipients in Victoria were exempt from penalties.

“You’ll get an SMS from the Department of Education, Skills and Employment about this.”

Ms O’Connell said AUWU members reported receiving one text message from the department in recent weeks, warning of the reintroduction of mutual obligations – which she said was not good enough.

“We’re extremely worried about people who aren’t familiar with the system to begin with, and the short time between the announcement last Friday and the changes applying from Monday, will mean people haven’t had time to notice a change is coming,” she said.

“People may not fully grasp the implications of not upholding their requirements.”

The Community and Public Sector Union, representing Centrelink employees, has also called for mutual obligations to remain paused, as well as the reintroduced liquid assets test which creates a threshold for how much cash a person can have before receiving welfare.

“There are close to one million unemployed Australians today, and they are doing it tough. They do not need the added stress of losing their income support if they cannot meet an arbitrary test on their job-hunting efforts,” said CPSU National Secretary Melissa Donnelly.

“Our members want to help the government get this right, that’s why they are asking for the supplement to be maintained and for mutual obligation and the liquid asset waiting period to remain paused.”

The CPSU feared that people who withdrew some superannuation under the government’s early release scheme – which some three million Australians took advantage of – may disqualify some from JobSeeker, thanks to the extra cash in their bank accounts.

The union said it expected the changes “will put strain on” Centrelink staff and resources, with welfare recipients calling for information and fears of more people applying for welfare as JobKeeper is wound back.

The New Daily has contacted the Department of Employment and Services Australia for comment on how much communication has gone to welfare recipients and how much more will come before Monday, and whether leniency or grace periods apply before recipients face penalties.

Services Australia General Manager Hank Jongen said communication around mutual obligations was the responsibility of the employment department.

“[The department] have advised jobseekers of their obligations,” he told The New Daily.

“If a jobseeker is confused about their Mutual Obligation requirements, they should seek clarification with their JobActive or Disability Employment Services provider.”

The AUWU hand-delivered letters to the offices of Prime Minister Scott Morrison and employment minister Michaelia Cash on Thursday, pleading for more time before the changes are rolled out.

“We implore you to extend the mutual obligation suspension until the end of the year, or at the very least one month, to allow adequate time for thorough communication with people who rely on income support to live,” the letter said.

“All we ask is that mutual obligations not be reintroduced on the 28 September. Please allow time for a consultation and communication period before the reintroduction of any further mutual obligations penalties.”

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