Media release: Poverty risk rises with over 22,000 Canberrans to lose $300 per fortnight from Friday
24 September 2020
This Friday, over 22,000 Canberrans face the loss of $300 per fortnight as the Australian Government’s Coronavirus Supplement is reduced, pushing many into poverty. The ACT Council of Social Service (ACTCOSS) is calling on the Australian Government to extend the existing Coronavirus Supplement of $550 per fortnight and to move quickly to legislate a permanent, adequate JobSeeker rate that means people can cover the basics.
ACTCOSS CEO, Dr Emma Campbell, said: “There are currently 22,676 people in the ACT receiving income support payments boosted by the Coronavirus Supplement. Around 15,000 of these are receiving JobSeeker and Youth Allowance while looking for work – this figure has more than doubled from just over 6,500 prior to COVID-19.
“Analysis undertaken as part of our latest ACT Cost of Living Report found that, prior to the Coronavirus Supplement, the single rates for Newstart (now JobSeeker) and Youth Allowance were $173 and $226 below the poverty line respectively.
“When the supplement is reduced by $300 per fortnight on Friday, recipients are again going to be pushed into poverty and be unable to cover the basic costs of rent, food, medical bills, utilities and transport.
“An ANU analysis of the impact of changes to the JobSeeker payment found that the $550 Coronavirus Supplement reduced the poverty rate for JobSeeker and Youth Allowance recipients from around 67% to just under 7%.
“Before COVID-19, it was estimated that 30,000 people were living below the poverty line in the ACT. When the Coronavirus Supplement is removed, given that 8,500 more Canberrans are relying on income support, poverty rates could increase by around 25%, nearing 40,000 individuals.
“The reduction and removal of the Coronavirus Supplement will see over 22,000 Canberrans face a struggle to afford food, rent, healthcare, and energy bills. A recent survey found that 80% of people receiving the supplement said they would have to skip meals and reduce how much fresh fruit and vegetables they buy once their payment is reduced by $300 per fortnight from this Friday.
“The changes will also have a negative impact across the ACT economy. Modelling by Deloitte Access Economics found that cuts to the Coronavirus Supplement will set the ACT economy back significantly, reducing consumption per person by $504, reducing economic output per person by $382, and resulting in the loss of 1,120 full-time equivalent (FTE) jobs in Canberra in 2021-22.”
Dr Campbell concluded: “The Federal Budget will be handed down on 6 October, one week before Anti-Poverty Week on 11-17 October 2020. One budget measure that would help prevent poverty would be to permanently increase the rate of JobSeeker and related allowances to an adequate level. This would also provide a much-needed boost to domestic consumption and local employment. Cutting the Coronavirus Supplement and returning JobSeeker to $40 a day is bad for poverty levels, bad for jobs, and bad for Canberra.”
Find the 2020 ACT Cost of Living Report here.
Find the results of an ACOSS survey on the impact of cuts to the Coronavirus Supplement here.
Find out about the Raise the Rate for Good campaign here.
Find out about Anti-Poverty Week here.
For more information or comment, please contact
Dr Emma Campbell, CEO, ACTCOSS, on 0424 910 617 or 02 6202 7200.
2020 ACT Cost of Living Report Key Findings
Approximately 30,000 people live below the poverty line in the ACT
- The latest estimate of the national poverty line for a single person is a minimum income of $457 per week
- Before the COVID-19 health emergency, it had been estimated that 8.6% of the total ACT population were living below the poverty line, equating to approximately 30,000 people.
The rate of Newstart was well below the poverty line and failed to keep up with cost of living
- As at December 2019, the weekly Newstart (now JobSeeker) payment for a single person without children was $173 below the poverty line
- In the year from December 2018 to December 2019, Newstart recipients effectively experienced a reduction in income due to the payment failing to keep up with changes in the cost of living.
The Coronavirus Supplement increased JobSeeker above the poverty line
- The introduction of the $550 per fortnight Coronavirus Supplement from 27 April to 24 September 2020 saw JobSeeker (formerly Newstart) rise above the poverty line by $105 per week – finally becoming adequate to meet basic living costs for many recipients.
- When the Coronavirus Supplement is reduced, JobSeeker will return below the poverty line and see over 1,000 jobs lost in the ACT
- The reduction of the Coronavirus Supplement by $300 per fortnight from 25 September 2020 will see these payments drop below the poverty line again by around $45 per week. The complete removal of the supplement at the end of the year would see this poverty gap increase to $170 per week.
- The economic impact of the removal of the Coronavirus Supplement would be a loss of 1,120 full-time equivalent jobs in the ACT in 2021-22.
The number of people in the ACT looking for work while on JobSeeker and Youth Allowance has more than doubled during the COVID-19 pandemic
- From December 2019 and July 2020, the number of people in the ACT who were looking for employment while in receipt of JobSeeker and Youth Allowance more than doubled from just over 6,500 to just under 15,000.
Without the Coronavirus Supplement, the number of people in the ACT living below the poverty line could increase to around 40,000
- Without the Coronavirus Supplement, the number of people in the ACT living below the poverty line could increase by around 25%, approaching 40,000 due to there being additional 8,500 JobSeeker and Youth Allowance recipients than before the COVID-19 pandemic.
Find the 2020 ACT Cost of Living Report here.