Huge setback for 400,000 on dole
Workers who lose their jobs as a result of COVID-19 in coming weeks could be forced to wait for months before claiming JobSeeker.
Tough new rules for when you can claim the dole come into force today in a move that will force thousands to rely on their savings for longer.
An estimated 400,000 workers who face retrenchment in coming months could now be forced to wait up to 12 weeks for unemployment payments under the changes.
A tough new "liquid assets" test to be reintroduced from today is set to force the newly unemployed to live off their savings before they can claim JobSeeker.
The liquid assets test applies to anyone who has more than $5,000 in the bank but it includes redundancy pay that is yet to be received.
Labor's social services spokeswoman Linda Burney warned the asset test even includes money parents have lent to children.
"So, as of today, the Government is bringing back the Liquid Assets Waiting Period," Ms Burney said.
"What that really means is if you've got, like you said, a redundancy payment, if you've accessed your superannuation, and that money is sitting in the bank.
If for example, you might have some shares, or you might have lent some money to your children, you're waiting for it to be paid back. That's all considered a liquid asset."
The liquid assets test was scrapped in March when the COVID-19 pandemic first hit but are being reintroduced from today.
A separate assets test for cars and investment property being re-introduced is also expected to boot 37,000 people off the dole entirely.
There's serious concerns that workers who access their super early under COVID-19 hardship grounds could be stung by the little-known rule. It means many workers facing redundancy might be better off to keep their super nest egg untouched and simply apply for the dole.
Ms Burney is urging the Morrison Government to reconsider the decision.
"Labor is arguing that this is not the time to bring back that test.The fact is that we are going to see, as I said, an additional 400,000 people on the unemployment queues," she said.
Ms Burney said workers should not be penalised for having a modest amount of savings when they are losing jobs as a result of government ordered shutdowns.
"You know, your car blows up, your car needs new tyres, your fridge, your fridge packs it in - that is the money that you rely on for emergencies," she said.
"And for the Government to expect people to use up all that money before they can access, access JobSeeker is really a false economy."
The decision to slash the value of JobSeeker by $300 a week will also create hardship.
"Come the end of this week, people who are on JobSeeker will have their Coronavirus Supplement halved. There will be $300 less in people's bank accounts come the end of the week," she said.
"And at the moment, the fact is that between now and Christmas, there will be 400,000 people additional who are on JobSeeker who cannot get a job."
But Treasurer Josh Frydenberg said the budget would offer more support to help get people into jobs.
"We recognise that people are doing it tough," he said.
"This money is really important to them. But we also know the best thing we can do to help people who are on JobSeeker is to get them into a job. So you'll see other initiatives in the budget in two weeks' time designed to help create more jobs across the economy."
Originally published as Huge setback for 400,000 on dole