Department of Social Services officials this week confirmed the government still plans to double the liquid asset wait time to up to six months.
It means people applying for JobSeeker who have more than $18,000 would have to wait 26 weeks before receiving a payment.
The draft legislation is currently before the Senate, but Labor’s social services spokesman Linda Burney says the government should walk away from it.
“Now is not the time to introduce more uncertainty and make it more difficult for Australians who have lost work to get support,” she said.
“The harsh reality is that there are now 13 JobSeekers for every one job vacancy in Australia – and the prime minister needs to show more understanding.”
The liquid assets test is currently on pause, but will restart in late September for people applying for welfare.
The maximum waiting period of 13 weeks applies to people with $11,500 or more of liquid assets, such as money in the bank or redundancy payments that haven’t been paid out.
Restarting the policy is expected to affect 6000 Australians.
“The Morrison government wants Australians who have lost work to eat through their savings before they can receive help,” Burney says.
“If people are forced to run down every last dollar, they will have no buffer for bills and emergencies like a broken car or fridge – making it harder for people to get back on their feet.”
Burney is also urging the government to make a quick decision over the rate of the aged pension, which is not due for an increase in September because inflation has gone backwards.
Prime Minister Scott Morrison has said he will review the decision as he pulls together the October federal budget.
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