Workers in NSW could be weaned off COVID-19 Disaster Payments as soon as mid-October, based on current inoculation trends, while Victoria could be cut off one month later, after the government announced an exit strategy in step with the “National Plan”.
Treasurer Josh Frydenberg on Monday announced that the Morrison government will begin winding down the COVID-19 Disaster Payment for workers once 70 per cent of a state or territory’s over-16 population is fully vaccinated.
The government’s COVID-19 Disaster Payment was in late July increased to offer weekly payments of $750 to those who have lost 20 or more hours of work a week as a result of lockdowns, and $450 a week to those who have lost between eight and 20 hours of work.
Once a state or territory reaches 70 per cent full vaccination, workers who seek to continue receiving the Disaster Payment will be forced to reapply on a weekly basis, to prove that they continue to be eligible.
When 80 per cent of a state or territory’s over-16 population is fully vaccinated, the payment will taper off even further, before ending entirely over a two-week period.
The first week after a state reaches the 80 per cent vaccination rate, recipients of the support measure will have their payments slashed to a flat payment of $450, for a loss of eight hours or more.
Meanwhile, those receiving COVID-19 welfare support will have their payments cut in half, to $100.
During the second week, the payment will be reduced even further to $320 a week for those who have lost eight or more hours of week, the same rate as JobSeeker.
Chartered Accountants Australia and New Zealand tax leader Michael Croker said the announcement is set to cause further confusion for business owners, and in turn, spark difficult conversations for their accountants.
“This has important ramifications for businesses which have stood down employees due to COVID health orders,” Mr Croker said.
“The COVID Disaster Payment currently has both general and location specific eligibility rules, and the weekly re-application process needs to be clarified so that both employers and employees can make informed decisions as they also grapple with the ‘roadmaps’ published by Victoria, NSW and ACT.
“Accountants should stand-by for announcements by the NSW and Victoria governments on phasing-out of their COVID business support programs. Difficult conversations with SME clients are ahead.”
NSW is currently on track to accomplish a fully vaccinated rate of 80 per cent by mid-October. Victoria, meanwhile, is expected to hit the same target in November. Those who remain affected by COVID-19 restrictions will be left to turn to Centrelink.
In a statement on Wednesday, Mr Frydenberg said the Morrison government has offered more than $13 billion in business and household support through the Delta outbreak – which emerged in June – alone.
“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 per cent, 80 per cent, in accordance with the plan agreed at national cabinet.”
The announcement comes just one month after Mr Frydenberg fired a warning shot to state leaders, who he said would have to get used to living with COVID-19 without the aid of federal support.
The COVID-19 Disaster Payment has so far supported about 2 million people across the country, Mr Frydenberg said, and paid out $9 billion in support funding since it was established in June.
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