Billions in welfare spending urged as cost of living bites harder

The Albanese government is being urged to lift welfare payments as skyrocketing cost-of-living puts further pressure on household budgets.

In a submission ahead of the May 12 budget, the government’s Economic Inclusion Advisory Committee (EIAC) is calling for a huge jump in welfare payments if the government wants to address current economic disadvantages.

According to the 2026 submission these welfare payments need to rise to match surging house prices and grocery bills.

“Increasing the rate of working age payments to improve economic inclusion – this is the Committee’s top priority and repeats calls made in previous reports,” the report said.

These increases should be across Jobseeker, Youth Allowance and the Remote Area Allowance (RAA) as “top priority”.

“The Committee calls for the base rates of Jobseeker and related working age payments to be substantially lifted to 90 per cent of the Age Pension,” the report said.

This should be done over four years with rates increasing by five per cent a year starting from 75 per cent of the Age Pension.

This would be an immediate increase for 1.4m Australians by around $202 a fortnight.

In year one it would cost the Australian government $1.6bn, before raising to $6.6bn in year four.

The report stated raising Jobseeker in four stages, rather than one, lowers the introduction cost across the first four years by around $8.8bn.

According to the submission the government also needs to immediately stop all Centrelink payment penalties, including suspensions, reductions and cancellations related to compulsory activities.

Following the submission from the federal government the Australian Council of Social Service (ACOSS) and UNSW released a study which showed 23 per cent of those surveyed believe they could live on current Jobseeker payments.

The current Jobseeker payments are $409 a week, and the survey found 87 per cent agreed they should be enough so people don’t have to skip meals.

ACOSS chief executive Cassandra Goldie said Australians understand poverty has “systemic causes”.

“The social security system is failing people and it needs to be fixed,” Dr Goldie said.

“People in Australia understand poverty has systemic causes and they want a social security system that actually keeps people out of poverty.

How much will Centrelink payments increase?

Millions of Australians recently received a cash boost on March 20 due to social security indexation.

Social security payments are indexed twice a year – in March and September – aimed at matching inflation, so welfare payments.

The government is increasing “deeming rates” – the assumed income Centrelink calculates you earn from your savings and investments when working out your pension or benefit payment. Under the new rates, the government will assume you earn 1.25 per cent on savings up to $64,200 for singles (or $106,200 for couples), and 3.25 per cent on any amount above that. This means pensioners with significant savings may see their payments reduced, as Centrelink will assume their money is earning more than before.

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Minister for social services Tanya Plibersek said thanks to indexation, five million Australians received a boost to their payments.

“To make sure our social security system delivers value for taxpayers it must be grounded in fairness, which is why we have made responsible adjustments to deeming rates,” she said in late March.

“We’ll continue to make sure the system is there to support those who need it most, ensuring that everyone can make ends meet and no one gets left behind.”

Age Pension

Single recipients will see their maximum payment increase to $1,200.90 a fortnight, which is about $22.20 a fortnight.

Older Australians in a couple payments will increase by $16.70 to $905.20 per fortnight.

Jobseeker

Singles with no dependants will see their maximum payment increase of $15.10 to $817.50 per fortnight.

Couples will see an increase to $748.20 each, up $13.80.

Parenting Payment

Single rate will increase to a maximum by$19.60 to a maximum of $1,066.30 a fortnight.

Those in a couples rate will increase to $748.20, up $13.80.

Commonwealth Rent Assistance

Single rates will increase to a maximum, up $4 to $219.40 per fortnight.