COVID-19 disaster payments to be scaled back as vaccination rates rise

Financial support for people who have lost work due to COVID-19 will soon be wound back, with the federal government looking to discourage states from imposing lockdowns once vaccination rates hit their targets.

The Commonwealth-funded COVID-19 disaster payment gives $750 a week to people who have lost at least 20 hours of work, and $450 a week to those who have lost between eight and 20 hours.

But the federal government will begin winding down the payments as each state and territory hits the 70 per cent and 80 per cent target vaccination rates for their populations aged 16 and over.

When a state or territory reaches 70 per cent fully vaccinated, people will have to reapply each week for the payment, instead of it being automatically renewed.

At 80 per cent, the payment will be phased out entirely within two weeks.

Federal Treasurer Josh Frydenberg said the announcement would “provide businesses and households with the certainty they need to plan for the future”.

“As restrictions ease, the economy is well positioned to bounce back,” he said.

The federal government has long harboured concerns its financial support for workers makes it easier for state and territory leaders to use lockdowns to control outbreaks, as it ameliorates some of the economic impact.

This move is designed to push premiers and chief minister to minimise their use of lockdowns by withdrawing the financial safety net.

“As I have said before, we can’t eliminate the virus; we need to learn to live with it in a COVID-safe way,” Mr Frydenberg said.

“This means we must ease restrictions as vaccination rates hit 70 to 80 per cent in accordance with the plan agreed at National Cabinet.”

ACT Chief Minister warns it is too early to cut payments

For the ACT and New South Wales, the cut to support payments is imminent.

Already, more than 62 per cent of ACT residents are fully vaccinated, as are more than 61 per cent of eligible NSW residents.

Restrictions across Canberra are due to ease from October 15, when the territory is expected to have reached the 80 per cent vaccination threshold.

On Tuesday, Chief Minister Andrew Barr was seeking an “urgent” update on the future of the payments.

“I certainly hope that the Commonwealth will continue to make these payments because there will be some individuals who will still have their hours of work restricted because of the gradual transition out of lockdown,” he said.

Density limits for businesses and caps on gatherings will continue until at least late November under the ACT’s pathway out of restrictions.

That means some workers could still be getting significantly reduced hours, but no COVID-19 Disaster Payments, for up to a month between late October and late November.

Once a jurisdiction hits 80 per cent fully vaccinated, the payment will drop to a flat rate of $450 for anyone who has lost more than eight hours of work a week.

The supplement for welfare recipients will drop from $200 a week to $100 a week.

In the second week, the payment will drop again for those who have lost at least eight hours of work to $320 a week, while welfare recipients will receive no extra support.

After that, workers will have to apply for unemployment benefits if they need financial support.

The pandemic leave disaster payment, which gives $1,400 a fortnight for anyone who cannot work because they have to isolate, quarantine or care for someone with COVID-19, will remain in place until the end of June 2022.

No word on future of support for businesses

The federal government is yet to announce the future of business support payments, which are jointly funded by the Commonwealth and states and territories.

“The federal government continues to work with the states and territories in lockdown on tapering business support payments once vaccination rates hit 70 per cent in those jurisdictions,” Mr Frydenberg said.

“We will have more to say shortly.”

He said the federal government had provided more than $13 billion in support for businesses and individuals during the recent Delta outbreaks.

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