Should JobSeeker payments be made weekly instead of fortnightly?
Yes, says the e61 Institute, a non-profit, non-partisan economic research institute.
Weekly payments could help reduce hardship and financial stress without costing taxpayers more, it says.
The institute recently compared JobSeeker payments in Australia (fortnightly) with those in New Zealand (weekly).
It found that the spending by Australian recipients fluctuated more and were more likely to experience financial stress and rely on payday loans than their New Zealand counterparts.
“Our research indicates that allowing JobSeeker recipients to opt-in to weekly payments could reduce financial hardship at little or no extra cost to the taxpayer,” says e61 Institute Research Director Dr Gianni La Cava.
Click here to read the research in full
“JobSeeker recipients in both countries have significant spending spikes on pay days but these are much larger for Australians who get paid less frequently.
“We clearly see that weekly payments smooth spending thereby reducing the risk of running out of money and experiencing financial hardship and stress,” La Cava says.
The research found that Australian recipients are more likely to be living hand-to-mouth (defined as having less than $500 in their bank accounts).
Australian recipients are also more likely to experience debit payment failures on their bank accounts, a potential sign of financial hardship.
They are also more likely to rely on cash and turn to high-interest payday loans.
“Less frequent payments appear to be linked to a higher demand for cash and short-term credit in Australia,” says Dr La Cava.
“This may partly reflect the greater market presence of payday lenders in Australia but also Australian recipients’ greater difficulty in getting from one payday to the next.”
The institute says its study shows no evidence that more frequent payments encourage wasteful spending; New Zealand recipients spend less on gambling, alcohol and tobacco despite being paid more often.
“Australia already provides weekly payments to people in cases of extreme financial hardship,” Dr La Cava says.
“Extending this option to all JobSeeker recipients, as New Zealand does, could reduce hardship without the cost of increasing the payment rate.”
KIWI JOBSEEKER SUPPORT
In New Zealand, Jobseeker Support comes with an automatic winter energy payment (NZ$20.46/A$17.78 a week for singles and NZ$31.82/A$27.65 weekly for couples with children from May 1 to October 1).
Recipients need to reapply to Jobseeker Support every six months.
An online profile is required (like Australia) and there are obligations as well.
