The proposal would increase working age payments (primarily JobSeeker Payment). Three options have been costed.

Option 1

The minimum amount a JobSeeker Payment recipient receives through private income and government payments would be set to the Organisation for Economic Co-operation and Development (OECD) relative measure of poverty.¹

• Total income encompassing earned income and government income support for single JobSeeker Payment recipients without dependents would be increased to be at least 50 per cent of Australia’s equivalised median household disposable income.²
• Members of a couple would have their income support payment increased such that the current JobSeeker Payment ratio between members of a couple and singles without dependents is maintained (the maximum basic rate for a member of a couple is currently around 90 per cent of that for a single without dependents).
• Similarly singles with dependents would have their payment increased such that the payment ratio between singles with and without dependents is maintained (currently around 108 per cent).

The JobSeeker Payment is currently indexed twice per year to Consumer Price Index (CPI). Under Option 1, payment rates would instead be benchmarked twice per year to 50 per cent of the equivalised median household disposable income.

Option 2

The single (without dependents) maximum basic rate for JobSeeker Payment and related working age payments would be increased by $95 per week ($190 increase to the fortnightly maximum basic payment rate). The maximum basic rate for a member of a couple as well as for a single with dependents would be increased proportionally such that the current payment ratios relative to singles without dependents are maintained (90 per cent and 108 per cent respectively). The affected payments are as follows:

• JobSeeker Payment
• Youth Allowance (both away from home rates for students/apprentice and Other)
• Austudy
• Abstudy
• Sickness Allowance (becomes JobSeeker Payment from 20 March 2020)
• Special Benefit
• Widow Allowance (becomes JobSeeker Payment from 20 March 2020)
• Crisis Payment

There would be no change to current indexation arrangements.

Option 3

In addition to the increase in payments under Option 2, recipients of these payments would be entitled to a 30 per cent increase in the maximum rate of Commonwealth Rent Assistance.

For all options, the following information was sought.

• The financial implications of increasing JobSeeker Payment rates as detailed above.
• The estimated percentage increase in the social security and welfare budget function.
• A comparison of how expenditure on social security and welfare as a percentage of total budget expenditure would change as a result of the proposal.
• A comparison of how expenditure on JobSeeker Payment as a percentage of social security and welfare expenditure would change as a result of the proposal.

In addition, for Options 2 and 3:

• A comparison of the current and proposed maximum basic rates of the JobSeeker Payment.

The proposal would have effect from 1 July 2020.

¹50 per cent of the equivalised median household disposable income across Australia is the term that OECD uses to determine the poverty line. This is published by the OECD in its Income Distribution Database available at: https://stats.oecd.org/index.aspx?queryid=66670
² Household disposable income measures the income of households (wages and salaries, self-employed income, income from unincorporated enterprises, social benefits, etc.), after taking into account net interest and dividends received and the payment of taxes and social contributions. [Net signifies that depreciation costs have been subtracted from the income.]