The Australian government’s coronavirus handouts during the lockdown has helped to pull millions from poverty, a study has claimed.
With millions of Australians thrown into unemployment or suffering reduced work hours, the government’s JobKeeper and JobSeeker saved more than 2.2 million people from poverty.
Without the government’s help, 3.8 million Australians – or about 15 per cent of the population – would have suffered.
These payouts had also ‘reduced measures of poverty and housing stress, with both now below what they were prior to COVID-19’ after JobSeeker payments were doubled.
People are seen in a long queue outside a Centrelink office in Brisbane on March 24 (pictured) as coronavirus lockdowns began
The Australian government introduced JobKeeper and increase JobSeeker when lockdown began in March (pictured, Australia’s Prime Minister Scott Morrison)
The study was conducted by Ben Phillips, Matthew Gray and Nicholas Biddle from the Australian National University.
The trio researched the effects of Australians being supported by the government, which seemingly lowered the poverty gap by 39 per cent.
But when JobSeeker and JobKeeper payments are reduced once again from September 28, the paper estimates that 740,000 people will be worse off.
This reduction will see 1.8 million Australians in poverty.
‘It is clear that these two payments have boosted the incomes of Australians above what they would have been if the social security system had been left more or less as is during the COVID-19 period,’ the paper reads.
Australians were plunged into unemployment due to COVID-19 (Pictured: Tables and chairs in an empty bistro area is seen at the Notting Hill Pub in Melbourne on March 23)
Melbourne’s Stage Four lockdown (pictured on August 28) has left streets empty and thousands out of work
The study also found that single parents and Newstart and Youth Allowance recipients were much better off with the added payments.
‘With the initial COVID-19 benefits policy, we’re almost at the point where there’s no poverty for households that usually have extremely high rates (of poverty),’ Mr Phillips told The Australian.
‘But we wouldn’t necessarily advocate this policy forever.’
Despite the government’s generosity, Mr Phillips pointed out that Australia’s welfare system was not fair enough.
‘It does show even in normal times the welfare system was not really adequate,’ he said.
‘It’s supposed to be a reasonable buffer through good and bad times. And now we’re in a bad time and it was not nearly enough.’
People are seen wearing masks walk through Sydney’s CBD on August 28 (pictured) as the pandemic threatened to spill out from a gym cluster
Signage at a restaurant now closed on King Street in Newtown in Sydney on March 23 due to COVID-19 (pictured)
More than three million Australian workers will continue to receive JobKeeper until the end of March 2021 but at a lower rate.
The wage subsidy will be reduced from $1,500 a fortnight to $1,200 – and new eligibility tests will be introduced to ensure the money only goes to those genuinely in need.
A lower $750 rate will apply for those who work less than 20 hours a week under a new two-tiered system.
JobSeeker unemployment benefits are also being increased by $250 a fortnight to $815.70 until December.
A nearly deserted Bourke Street Mall is seen on August 28 (pictured) as all but essential shops were shut down due to Stage Four coronavirus restrictions
A study found that the governments generous handouts ‘virtually eliminated’ poverty for some Australians (pictured: Sydneysiders on Castlereagh Street during the pandemic)
This is above the old Newstart rate of $565.70 but below temporarily doubled level of $1,115.70 that runs out on September 24.
Prime Minister Scott Morrison announced details of the changes in July, which will see JobKeeper extended from September 27 to March 28, 2021 at a cost of $16.6billion, taking the total cost of JobKeeper to $86.6billion.
‘Now we’re in a position we can run a two-payment system,’ he said.
‘We’re looking to see fewer businesses on JobKeeper, we’re looking forward to a time they won’t need it.
‘This is about ensuring we move to the next phase, to prevent the worst impacts of this crisis.’
How are the support payments changing from September
* The $1500 fortnightly wage subsidy will continue until September 27
* From the end of September to January, JobKeeper will be reduced to $1200 for full-time workers and $750 for people working 20 hours or less
* From January to March, the full-time rate will be $1000 and part-time will reduce to $650
* Businesses turning over less than $1 billion will have to requalify for the program at both stages through showing a 30 per cent drop in revenue.
* Businesses with more than $1 billion in turnover have to demonstrate a 50 per cent fall
* The elevated unemployment benefit will remain at $1100 a fortnight until September 24
* From that date until the end of the year the $550 coronavirus supplement will be cut by $300 to make the overall fortnightly payment $800
* People will be able to earn up to $300 without having their payment reduced
* The mutual obligation rules requiring people to search for four jobs a month will restart on August 4
* Penalties for people refusing a job offer will be reintroduced
* Job search requirements will increase in September when the assets test will also return
* The permanent JobSeeker rate to take effect from January next year will be announced in the October 6 budget.