Jobseekers may get a permanent boost to their payments but lose smaller benefits worth hundreds of dollars a year to cover medication, transport and education costs, under a plan being considered by the federal government.
The Australian reported on Monday that the expenditure review committee of cabinet last week considered a plan to abolish numerous supplementary payments available to the unemployed along with any proposed increase to jobseeker payments.
The prime minister, Scott Morrison, confirmed last week the government was considering an increase to the jobseeker payment. The temporary $150 coronavirus supplement is due to expire at the end of March.
No decision has yet been made on the reported proposal to abolish supplementary payments nor on any increase to the base rate of jobseeker – which is due to revert to $565 a fortnight.
Existing supplementary payments include the energy supplement, which starts at $8.80 per fortnight for a single person and is paid to all jobseekers, and the pharmaceutical allowance, which is $6.20 but only paid to eligible long-term jobseekers over 60.
Other more obscure fortnightly supplements include the remote area allowance ($18.20 per fortnight for a single person); language, literacy and numeracy supplement ($20.80 per fortnight); approved program of work supplement ($20.80 per fortnight); pensioner education supplement ($62.40 per fortnight); and the mobility allowance ($97.90 per fortnight).
These additional payments have regularly been used by the federal government to argue people on jobseeker actually receive more than $40 a day.
Department of Social Services analysis released in 2018 found the average jobseeker who received supplementary payments got an extra $14.64 a fortnight. The calculation included all supplements except the education entry payment and the telephone allowance, which are not paid fortnightly.
The departmental analysis was based on 733,088 people who were on Newstart at the time, but the cohort of people on unemployment benefits has changed markedly as a result of the pandemic-induced recession, with some 1.3 million now on jobseeker payments.
The streamlining proposal is not expected to make any changes to more common and generous additional payments such as commonwealth rent assistance or family tax benefits.
Last year, the government reformed the old Newstart payment, rolling in other benefits including sickness allowance, to create the jobseeker payment.
Asked how seriously the government was considering the changes reported by the Australian, Josh Frydenberg said he would not “speculate on speculation in today’s press”.
The federal treasurer said the government would make an announcement about the future rate of jobseeker when the boosted rate ends in March.
Responding to Guardian Australia’s analysis that estimated reverting to the old jobseeker rate would cost some of the poorest electorates up to $3m a fortnight, Nationals MP Pat Conaghan told the Guardian he would support an increase to jobseeker of 20-25%.
Kristin O’Connell, a spokesperson for the Australian Unemployed Workers Union, said she feared the government was gearing up for “a meagre rate increase after supplements are removed”.
“Income support must keep people out of poverty,” she said.
“It shouldn’t mean we depend on supplements that are akin to a rations program just to pay for electricity or medication – not that the measly supplements we have now are actually enough to cover those items.
“Unemployment payments must be above the poverty line and an increase is decades overdue, but abolishing supplementary payments without raising the rate substantially will leave many of us worse off than we were before the pandemic.”
Cassandra Goldie, the chief executive of the Australian Council of Social Service, said the “main thing the government needs to consider in its decision on jobseeker is that people have enough to cover the basics, including housing, groceries, transport and medical expenses”.
“We certainly cannot go back to the way things were with the brutal old Newstart rate, when most people on the payment received just $41 a day, including the energy supplement, which amounts to just 60 cents a day,” she said.
Goldie said Acoss wanted an increase of at least $25 a day, which would take the rate above the poverty line and closer to the pension rate “as it used to be”.