Effectively doubling the rate of JobSeeker during the Covid-19 pandemic boosted recipients’ well-being and reduced their financial stress, according to research by the e61 Institute.
The analysis found recipients’ self-reported well-being rose by about four per cent and financial stress fell by seven percentage points when the $550-a-fortnight JobSeeker Coronavirus Supplement was introduced in April 2020.
The well-being of recipients for whom JobSeeker made up more than half their annual income, mostly long-term recipients, rose by more than 25 per cent, the research found.
The share of Jobseeker recipients having difficulty paying their bills fell from 25 per cent in 2019 to 20 per cent in 2020. This corresponded to 37,000 more Australians being able to pay their bills.
However, the effects were temporary, with both well-being and financial stress returning to pre-pandemic levels in 2021 when the supplement was removed.
The findings are based on analysis of The Household, Income and Labour Dynamics in Australia (HILDA) Survey, in which respondents provide a subjective assessment of their well-being.
“The JobSeeker supplement hugely improved well-being and reduced financial stress,” said e61 Research Manager Pelin Akyol.
“This tells us that the policy was effective and successfully targeted people who really needed support.”
The research also found allowing people to withdraw their super early had little impact on well-being and financial stress for most withdrawers, suggesting the policy was too broad and less targeted.
“This may be because some early withdrawers used the funds for purposes beyond immediate financial relief, such as discretionary spending or investment in alternative assets,” said Dr Akyol.
“If the purpose of the support payments is to reduce financial stress and support subjective well-being, future policy design during economic downturns may benefit from a more targeted approach.”
Between April and June 2020, e61 estimates that 2.5 million received the JobSeeker Supplement and 2.4 million applied for early super release with an average $8,223 withdrawn.
Contact details:
Charlie Moore: 0452 606 171