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JobSeeker numbers down - but expected to rise when JobKeeper axed

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A national drop in the number of people claiming unemployment payments in January and February is expected to be short-lived, with Treasury estimates of up to 150,000 jobs at risk when JobKeeper ends on Sunday prompting calls for more targeted support.

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Monthly data from the Department of Social Services released this week showed a marginal drop in the number of people on JobSeeker and Youth Allowance payments – from 1.37 million to 1.35 million – between January and February.

But the number of people looking for work on the low-income payments remained more than one third higher than 12 months ago, when there were 815,872 recipients.

Men aged below 34 years comprised the largest group of  low-income payment recipients, accounting for 313,146 of the total, followed by women aged above 45 years, with 276,702.

Of the total, South Australians accounted for 106,777 recipients in February – down 2.3 per cent from January.

The Federal Treasury on Wednesday estimated that between 100,000 to 150,000 people currently receiving the JobKeeper wage subsidy are at risk of losing their jobs when the program ends on March 28.

Figures released by the ATO  showed there were one million employees and 370,000 businesses that were still reliant on the JobKeeper subsidy at the end of January.

Charities, civil and business groups across the country have been anticipating an increase in the number of Australians dependent on the low-income payments when the JobKeeper wage subsidy ends on March 28.

But Treasury Secretary Steven Kennedy said there was a “wide band of uncertainty” around the JobKeeper estimate and that the number of people at risk of losing their jobs did not “commensurate increase in unemployment”.

Our view is that the adjustment away from JobKeeper will be manageable, and that employment will continue to increase over the course of this year, although the unemployment rate could rise a little over coming months before resuming its downward trajectory,” he said.

A spokesperson for the Department of Social Services said JobSeeker recipient numbers changed “regularly for a variety of reasons” but did not comment on whether the government expected an increase in  recipients to coincide with the end of JobKeeper.

JobKeeper’s completion will be followed by a drop in the fortnightly JobSeeker and related payment rate to $620 from April 1, following the end of the $150 coronavirus supplement and start of a permanent $50 fortnightly increase – the first increase in real terms for 25 years.

Welfare recipients are also currently able to earn up to $300 each fortnight before their low-income payment is reduced – but this will drop to $150 – as part of the changes.

Kristin O’Connell, from the Australian Unemployed Workers Union, said the latest JobSeeker and Youth Allowance figures were “unsurprising” and highlighted a need to not only grow employment opportunities but to ensure jobs were long-term and stable.

“We are worried about what’s going to happen at the end of March when people are no longer able to access JobKeeper payments,” she said.

“Right now there are nearly 300,000 people on unemployment payments who had a job and earned income in the last two weeks of February.

“Those people are working – they have a job – and they still can’t afford to live.

“Starting 1 April, you could be working up to 30 hours a week in a minimum wage job and be below the poverty line and still on unemployment payments – at 30 hours a week.”

O’Connell said the figures also underlined the need for greater financial assistance to support women.

“These figures show just how vulnerable women over the age of 50 are,” she said.

“At a time when we’re talking about women’s experiences working in parliament,we are ignoring the fact that our welfare system is the worst contributor to women’s inequality and forces people to stay in violent homes and relationships.

“Ultimately it means that women who have lower life-long earnings are more likely to become homeless.”

South Australian Council of Social Services Ross Womersley said more financial supports were required for female-dominated sectors.

“The COVID impacts have been gendered and with women’s jobs often the first to go, and the last to recover,” he said.

“We need to ensure that renewed economic stimulus really do target industries with high female employment … rather than the more male-dominated construction industries which are already approaching capacity. “

He said he expected the overall number of people on the low-income payments to grow as a result of the changes to JobKeeper, with South Australians particularly challenged by a high unemployment rate.

“South Australia has the highest unemployment rate in the country, and one of the lowest labour force participation rates – so we still face an enormous employment challenge as a state,” he said.

“We expect to see the numbers of people on JobSeeker increase over the next month or so, as the impacts of the phase out of JobKeeper and economic impacts of cuts to JobSeeker are felt … while the cuts to social security payments will see money and demand taken out of the economy.”

ABS statistics released last week showed South Australia’s unemployment rate remained the worst in the nation at 6.8 per cent in February, which was a full percentage point higher than the national average.

The state’s underemployment rate also rose to 8.6 per cent as more people looked to increase their hours.

Treasurer Rob Lucas said the State Government was investing in future jobs through its economic stimulus program, saying sectors historically dominated by women – such as aged care and disability – were being targeted through the government’s innovation and skills programs.

“The whole focus for government is about getting as many people into jobs and saving as many businesses as we can,” he said.

“Essentially if we can get people off benefits into paid employment that’s the best long-term solution for everybody.

“Two of the targeted areas are areas where there are a high percentage of older females and that’s aged care and disability care, so there’s a huge demand in South Australia for workers in that particular area.”

Asked if South Australia would look to provide greater concessions to low-income earners, Lucas said the State Government already offered “significant concessions” and that it was not the state’s responsibility to “in essence take over JobSeeker”.

“Everything the government is doing is trying to reduce the costs for households right across the income ranges … but in terms of supplemental payments like JobSeeker, that’s a Commonwealth Government decision and the State’s role is not to … go back into that particular area.”

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