It’s not just the end of JobKeeper that will push up unemployment in April.
The next ones, for April, won’t get published until May 20, nine days after next month’s budget.
If all of the extra people who lost their jobs remained available for work, they would push up the total number of unemployed Australians (Australians out of work who are also looking for work) from 778,100 to more than one million.
But JobKeeper isn’t the only thing that changed at the end of March.
The conditions attached to benefits are changing
At about the same time unemployment benefits in the form of JobSeeker (for those aged 22 and over) and Youth Allowance Other (for those aged under 22) were busted back to something closer to their pre-COVID levels.
Without the coronavirus supplement, which ended on April 1, the standard payment (excluding rent relief) fell from $715.70 to $620.80 per fortnight for single people and from $660.80 to $565.40 for partnered people.
And income tests were tightened, with the income singles can earn without losing benefits falling from $300 to $150 per fortnight, and the rate at which at which a partner’s income reduces benefits over a threshold climbing from 27% to 60%
From April this year the recommended minimum number of applications job seekers need to report each month climbed to 15. From July it will climb to 20.
Exemptions for sole traders and self-employed jobseekers ended on April 1.
The result is likely to be an increase in the labour supply — more people looking for work.
More people looking for work
This is both because more recipients will be required to look for work and also because the mutual obligation requirements and lower payment levels will make it less attractive to remain on benefits.
More people looking for work means more people counted as unemployed.
This graph provides a sense of the potential size of the effect.
It presents the number of unemployment benefit recipients counted by Centrelink alongside the number of people identified as unemployed by the Bureau of Statistics in each month’s survey between March 2019 and March 2021.
Unemployment benefit recipients versus unemployed
- ^ March (www.abs.gov.au)
- ^ 100,000 to 150,000 (theconversation.com)
- ^ one quarter of a million (drive.google.com)
- ^ 778,100 (www.abs.gov.au)
- ^ The true cost of the government's changes to JobSeeker is incalculable. It's as if it didn't learn from Robodebt (theconversation.com)
- ^ mutual obligation (www.servicesaustralia.gov.au)
- ^ What happens when you free unemployed Australians from 'mutual obligations' and boost their benefits? We just found out (theconversation.com)
Authors: Roger Wilkins, Professorial Fellow and Deputy Director (Research), HILDA Survey, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne