The national median or typical household income is $84,032 a year.
The government expects up to one million extra Australians to access Centrelink over the next six months as businesses across the retail, hospitality and travel sectors shuts down nation-wide and the economy heads towards recession in the first half of 2020.
Prime Minister Scott Morrison, Social Services Minister Anne Ruston and Treasurer Josh Frydenberg are scrambling to get the changes in place before the first payments are delivered in April. Government sources confirmed an announcement was expected soon, but the issue was complex with a variety of tax implications.
“The government is very mindful of this and we are working through a series of options for families in need,” a spokeswoman for Senator Ruston said. “We are committed to finding a solution to this issue.”
Research by Australian National University Crawford School of Public Policy professor Peter Whiteford and Bruce Bradbury from UNSW found that among two-earner couples aged 25-54, of the primary earners who lose their job, “about half would have received the coronavirus supplement”, while of the secondary earners, “only somewhere between a quarter and a third will get it”.
That would have left between 200,000 and 400,000 workers expected to lose their jobs without access to benefits and struggling to keep up with the cost of living. Women impacted by their partner’s threshold would have been disproportionately affected and left without any income at all.
“Given that in most couples the secondary earner is female, the different treatment has the potential to discriminate against women,” the research found.
The partner income thresholds have been in place since the Howard government but the unprecedented surge in applications to Centrelink has forced the government into the policy change, which is expected to cost billions. The government has already spent up to $198 billion or 10 per cent of the Australian economy on stimulus and survival packages.
One option being considered is to lift the partner income threshold to $75,000 a year while changes to family tax benefits and adjusting access to rental assistance and the coronavirus supplement are also on the table.
Labor leader Anthony Albanese proposed the $75,000 shift last week in a meeting with the Prime Minister and is understood to have received a positive reception from Mr Morrison.
Tax modeller and former public servant David Plunkett said the original design gave households wildly disparate results.
“If that stays in place for some considerable time (it) might lead to some justifiable feelings of injustice and unfairness,” he said.
Former Geelong RSL worker Laura McCauley was laid off last week. Ms McCauley was told by Centrelink she would not be eligible to receive assistance because her partner is an electrician and earns above the threshold.
“I’ve worked every day since I was 14 doing the paper run. I’ve paid my taxes. I have never asked for any help,” she said.
“The one time I need assistance, because they told me I don’t have a job any more, I cannot get it”
After she lost her job, Ms McCauley spent two days trying to contact Centrelink. Eventually, she got through on the phone, only to be told she couldn’t access any support because of her partner’s income.
“I said to them ‘so I have to dump my boyfriend to pay my bills? And the guy just said ‘I guess’.”
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With Liam Mannix
Eryk Bagshaw is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra