Peter Dutton’s policy to double the hours job seekers can work before losing welfare benefits has been welcomed by economists, who say reducing disincentives is vital to helping more people into employment.
, will lift the base rate of welfare payments, including JobSeeker and Youth Allowance, by $40 a fortnight from September.“We think the better approach is to allow people on a JobSeeker payment to work, say five or 10 hours a fortnight. It would give them a lot of extra money in their pocket compared to the $40 that the government is offering,” he said on Friday morning.“We want to get them off welfare and into work, and we want to have that conversation with the government.
“I think the opposition is right to highlight it and going forward, it needs to be part of the reform agenda.”A single person with no children starts losing their JobSeeker payment – currently $693.10 a fortnight – if they earn more than $150 over two weeks. If they earn more than $1337.50, they stop receiving the payment.
Treasurer Jim Chalmers said the government already had a major agenda to encourage more people into work, and the white paper would be central to further reform. “About one in four recipients earn a wage. These workers pay very high marginal tax rates of around 50¢ in the dollar if they earn more than $75 a week,” he said.
Recent e61 research found recipients did not necessarily reduce their work hours to avoid the higher marginal tax, so reducing that rate could let them earn more without creating incentives for people to stay on benefits. Australian Council of Social Service chief executive Cassandra Goldie said the main priority should be lifting the base rate of JobSeeker. She said those on JobSeeker included people who were studying, single parents, people with disabilities and older people facing financial ruin.
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