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Charities brace for ‘catastrophic’ surge as welfare supplement due to end

An Anglicare survey of 2000 clients, ahead of the introduction of the coronavirus supplement, found 58 per cent of those looking for help were out of work, with 46 per cent unable to afford basic essentials like food and medicine. A further 33 per cent needed help managing large bills on low income.

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Anglicare Australia executive director Kasy Chambers warned cutting the JobSeeker rate back to the pre-supplement level during the coronavirus pandemic would push more households into a crisis situation.

“We are very concerned about a jump in demand if JobSeeker is cut … people on the old rate needed our help just to make ends meet and hundreds of thousands of Australians have lost their jobs since then,” she said.

The government has reviewed the JobKeeper and JobSeeker scheme and is set to reveal a new plan for the economic recovery on July 23. It is unclear whether this will include an increase in the base rate of the dole, however charities, social services groups, the unions and the Labor Party have all backed calls for a permanent rise.

“If JobSeeker is cut, it’s charities like ours who will bear the cost,” Ms Chambers said.

Major charities have already seen a drastic increase in desperate people asking for help. Foodbank Australia has had 1.4 million people using their services each month since the coronavirus pandemic began, a 78 per cent increase. Many of those needing assistance were ineligible for government support, including temporary visa holders.

Treasurer Josh Frydenberg revealed on Monday the effective unemployment rate is at about 13.3 per cent, including those who have left the workforce, those not working any hours and people who are officially unemployed. The official unemployment rate is 7.1 per cent and Mr Frydenberg said this was likely to rise.

Treasurer Josh Frydenberg will release an economic update next week, including the fate of wage subsidy and unemployment benefit programs.

Treasurer Josh Frydenberg will release an economic update next week, including the fate of wage subsidy and unemployment benefit programs.Credit:Alex Ellinghausen

He said the federal government’s second wave of $750 payments to about 5 million people, including pensioners, veterans and carers but excluding those receiving the extra JobSeeker payments, comes at “an important time” for those challenged by the consequences of the pandemic.

Grattan Institute household finances program director Brendan Coates also expects the unemployment rate to increase, particularly if there are more lockdowns, making an ongoing increase in JobSeeker particularly crucial.

“We can’t afford to go back [to $560],” Mr Coates said.

“It would be catastrophic. It’s a recipe for a large number of defaults in the mortgage market and it’s a recipe for hardship and demand for charity going through the roof.”

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