Social advocates, welfare recipients and even business groups have urged the government to rethink its controversial changes to the JobSeeker allowance and to increase the rate further.

Even the head of the retailers association has said the proposal will hurt the unemployed and annoy employers.

Federal Parliament heard emotional evidence from Julie, a welfare recipient from Sydney, who lost her job during the pandemic and is also currently battling cancer.

“This wasn’t my life plan,” she said.

On Tuesday, the Senate’s community affairs committee held an inquiry into the government’s Social Services (Strengthening Income Support) Bill.

The legislation, announced last month, would boost the meagre base rate of the JobSeeker payment by $50 per fortnight, or $3.57 per day – but coming at the same time as the cancellation of the temporary coronavirus supplement, it represents an effective $100 drop per fortnight in the unemployment allowance.

• Related: Parliament told ‘gut-wrenching’ poverty stories as JobSeeker rate criticised

The federal government points out it is the first increase, in real terms, to the base rate since the 1980s, but charities and social agencies had long called for a far more substantial rise to the payment.

Also in focus are other controversial changes to the unemployment framework, such as a tightening of mutual obligations and a new phone hotline – dubbed ‘DobSeeker’ – for employers to report people who decline job offers.

Business group criticises changes

Paul Zahra, CEO of the Australian Retailers Association, told the Senate hearing his members “haven’t had much positive conversation” around that component.

“We believe it will drive more anxiety … we’re not in support of it. It doesn’t really add to solving the real problem here,” Mr Zahra said.

“We’re concerned of the impact this will have on the community.”

Other requirements of the new framework will obligate people on JobSeeker to apply for up to 20 jobs a month.

Australian Retailers Association CEO Paul Zahra. Photo: AAP

“It may drive the wrong behaviour, people just going through the process just for the purpose of securing unemployment benefits. That could just add more administration and cost to the retailers,” Mr Zahra warned.

“I’m not sure this is going to drive the impact we’re seeking here.”

He also believed the effective $100 per fortnight cut in the JobSeeker benefit would harm the economy, claiming “the majority of that will be felt in the retail industry”, with businesses selling food, pharmaceuticals and basic essentials to be affected.

Matt Grudnoff, an economist with The Australia Institute – a progressive think tank – said it would “take large amounts of money out of the economy”.

“Certainly that will lead to [more] job losses, than what would otherwise be the case if it hadn’t been taken out,” he said.

Mr Zahra voiced support for raising the rate closer to that of the aged pension, saying he believed further increasing unemployment benefits was among “the highest priority” in government programs that would support business incomes.

The pension is currently $860 per fortnight for a single person, while the new JobSeeker rate will be $615 per fortnight.

Numerous business groups, academics, economists and the Reserve Bank have called for a substantial rise to JobSeeker.

Earlier on Tuesday, Prime Minister Scott Morrison had decried that, “unemployed Australians are simply and regrettably not filling these jobs”.

The PM claimed that, despite measures to “incentivise” people to relocate to regional areas experiencing worker shortages, the trend would mean “the price of your groceries goes up”.

He did not make any further firm announcement to address that issue, but hinted that the government may look to tightly enforce its new rules around accepting job offers.

Scott Morrison speaks in Sydney. Photo: AAP

‘Enormous’ stress

In Tuesday’s committee hearing, senators heard from Julie, a woman who appeared alongside the Australian Council of Social Service to give evidence.

Julie said she had worked hard her whole life, and started receiving welfare for the first time after losing her job last year.

She feared what her life would be like under the new payment rate.

“It’s the continual worry of the insecurity, that I just don’t know what my life will be, when I’ve worked the majority of my life and been independent,” Julie said.

“The stress of that is enormous. I don’t want to be on welfare. This wasn’t my life plan.”

ACOSS CEO Cassandra Goldie. Photo: AAP

Julie fought back tears at several points as she gave evidence.

She recalled spending “hours searching for jobs I had no chance of getting”, then being diagnosed with an aggressive form of breast cancer in July.

She underwent chemotherapy and surgery, and will soon start radiation.

“It’s pretty sad to say, I’m fortunate my treatment coincided with a pandemic. I cannot imagine how I would have survived on the $560 a fortnight the government was paying me before,” she said.