The introduction of the Coronavirus Supplement in March 2020 meant that for the first time in 30 years, unemployment income support in Australia provided a basic standard of living. The extra $550 a fortnight became a means of sorely needed support for over 1 million unemployed Australians facing the worst labour market in recent memory.
Unfortunately, this support was short-lived. By September 2020, the Supplement was cut to $250 a fortnight. On 1 January 2021, it decreased further to $150. And the Supplement is due to cease completely from 1 April, meaning that the JobSeeker Payment rate will drop to the pre-COVID Newstart Allowance rate of around $40 a day.
Some of the worst affected by these cuts are those living in Victoria, where labour market recovery has been hampered by a second wave and extended lockdowns. EJA’s member centre, Social Security Rights Victoria, has been on the frontline responding to the impacts of COVID-19 in the state. In this article, they recount how cuts to the Supplement will deepen the financial, social and mental hardships currently faced by Victorians.
Another group particularly impacted by the cuts is single parents, for whom the pandemic has worsened existing pressures of balancing care work, employment and their own wellbeing. This was especially so for single working mothers, where the COVID crisis saw a marked decrease in their employment by five times more than men even prior to the second lockdown.[1]
Case studies collected by the National Council of Single Mothers and their Children about the life-changing impacts of the Coronavirus Supplement reiterate that the Supplement, far from merely a temporary bonus, acted as an essential component of a fair social security system which is now under threat.
Reflections from Social Security Rights Victoria
With the introduction of the Coronavirus Supplements, recipients of payments such as JobSeeker Payment reported significant improvement in their basic standard of living. The Coronavirus Supplement provided a sense of independence to people who reported normally feeling and being reliant on friends and family for loans to meet their basic living expenses. This situation is compounded for older workers, particularly women, who have had a 5% decrease in employment opportunities since COVID.[2]
In particular, we saw this reflected in our older clients (those aged 55 and over) who are not yet eligible for the Aged Pension but who find it particularly difficult to find work (increasingly so during the pandemic) and whom have have had to revert to relying on their children or other family members for financial support due to the untenably low rate of JobSeeker Payment, historically.
Our clients reported being initially fearful they would end up homeless with critical supplementary income provided through informal loans from family and friends being cut off due to loss of their own employment or business income. Anecdotally, this initial fear was eased somewhat with the introduction of the Coronavirus Supplement. The Supplement essentially provided at least part of the support JobSeeker and other Centrelink benefit recipients were usually having to rely on from family and friends.
A man in his 60s not able to find work due to disability, but struggling to meet the criteria for the DSP, stated:
“The ‘pandemic payments’ (Coronavirus Supplements) meant for us that we didn’t have to borrow money from family members or friends just to get by. This meant the world to me, to have my independence back in some regard and be able to feed myself and pay my bills without borrowing money all the time. As it is stripped back, we will go back to the old way of just getting by with the help of borrowing.”
Anecdotally we have heard people living with significant and numerous debts were able, for the first time in years, to start making some small repayments towards those debts. We also received feedback that with the Coronavirus Supplement people were able to do basis things such as buy safer cars, and therefore stop feeling they had to drive unsafe cars. Victoria is facing a fragile economic time. Victorians’ use of Lifeline was 16% higher than the rest of the nation in September and October 2020[3] and the local labour market continues to feel the impacts of an extended lockdown. The reintroduction of mutual obligations has placed additional pressure on those receiving Jobseeker Payment. In this landscape, the cuts to the Coronavirus Supplement are another blow to Victorians doing their best to recover from the pandemic.
Case studies from National Council of Single Mothers and their Children
Households with children with a female main income earner are more than twice as likely to live in poverty as those in which the main income earner is male[4], highlighting the impact of caring roles on poverty in Australia [5]. The Coronavirus Supplement at $550 made a profound difference for single mother families in receipt of the Parenting Payment Single or the Jobseeker Payment. Over half a million children had a parent on Jobseeker and nearly half a million children lived with a parent who received the Parenting Payment Single.
In the early evening of 13 January 2021, NCSMC asked people to describe the lived impact of cuts to the supplement. Below is an insight into their world.
Cuts to the supplement will greatly impact the quality of my children’s lives (and my own) I will again struggle to cover their basic needs, reducing the grocery budget will limit the variety of their diet, impacting on their nutrition. Sporting activities and swimming lessons (and driving to them) will become a stretch, and I will struggle to keep up with things like insurance and my own medical bills, especially as my rent has also increased. The financial stress is causing me so much anxiety that I am often in tears. I have no idea how I am going survive this year.
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2020 was an awful year but at least with the supplement I felt like I could be a fit parent for my kids and provide them with what they needed. 2021 is already terrifying, nothing is normal, and I do not think it will ever be back to how it was and now everything is much more expensive. I am swimming in debt from all the bills piling back up as the supplement decreased and I have not even looked at enrolling my son into school because I cannot afford the things he needs.
Rent alone has jumped 13% and is going to jump even higher in March at the end of the emergency period. Rentals are at 1% availability and single mums are not even getting a look in amongst the 40+ people looking at homes. We cannot compete because we cannot afford to match or offer more than what other applicants are offering and rental prices are now over 45-60% minimum of our income. So many single parents are now homeless with kids in Perth and I am facing that too, I could be on the streets in the next few weeks.
—
I am a single mother of an eight-year-old working part time. In September I was removed from parenting payment, which we were only getting by on, to jobseeker. With the supplement on jobseeker, I could afford to pay my rent in advance, bills, and school fees on time. With the reduced amount now and then nothing come March I am extremely stressed at how I am going to even provide anything other than a roof over my child’s head… I have also investigated TAFE to up skill. Nothing I have enquired and called about as a career is available in regional Victoria. My job provider was also not helpful and could only apologise for the situation I am in. I feel very inadequate as a mother and sole provider of my child with no help or direction to go to.
The National Council of Single Mothers and their Children welcomes new voices to contribute at https://www.surveymonkey.com/r/harshcuts2021
Conclusion
The Coronavirus Supplement has allowed millions of unemployed and under-employed Australians to live in dignity, provide for their children and tackle debt. The return to inadequate levels of support will reverse many of the gains individuals and families have been able to make in securing adequate standards of living. Social Security Rights Victoria and the National Council of Single Mothers and their Children join Economic Justice Australia in supporting the Australian Council of Social Services’ call for the Coronavirus Supplement to continue and for the Jobseeker rate to be made fair – permanently.
[1] https://mckellinstitute.org.au/research/articles/the-impact-of-covid-19-on-women-and-work-in-victoria/ [2] https://www.theguardian.com/business/grogonomics/2020/jul/30/across-australia-people-are-losing-jobs-and-its-older-workers-that-are-suffering-most [3] https://www.theaustralian.com.au/nation/politics/mental-health-crisis-one-million-lost-in-coronavirus-lockdown/news-story/fc8c1da341ca392166fce6aba9ca4f69 [4] ACOSS and UNSW Sydney, May 2020, Poverty in Australia 2020 Report’ [5] Dr Dados, N and Taksa, L. 14th April 2020, Pandemic’s economic blow hits women hard, Macquarie University