The recent increases in JobSeeker payments in Australia have not been sufficient to lift recipients out of poverty. While the adjustments made in recent years have provided some relief, they remain inadequate to cover essential living costs.
According to the Economic Inclusion Advisory Committee’s 2025 report, released two weeks ahead of the federal budget, these payments are still significantly below the threshold needed for a basic standard of living.
The Conversation reports that despite these increases, Australia ranks among the lowest OECD countries for short-term unemployment benefits, with support levels declining more than in any other high-income nation.
As the cost of living continues to rise, concerns are growing over the long-term social and economic impact of inadequate welfare support.
Payments Remain Inadequate
The committee, chaired by former minister Jenny Macklin, includes economists, social security experts, and representatives from unions, advocacy groups, and business. Their highest-priority recommendation is a substantial increase in JobSeeker and related working-age payments.
Research commissioned for the report estimates that every dollar invested in increasing JobSeeker would return $1.24 to society, through improved mental health, higher productivity, longer working lives, and reduced pressure on the healthcare and justice systems.
Australia’s out-of-work benefits have largely been indexed to the consumer price index (CPI) rather than wage growth, causing their relative value to decline. Compared to 24 other high-income OECD countries, Australia has seen the sharpest drop in benefits as a proportion of median disposable household income.
Despite recent increases, Australia remains near the bottom of OECD advanced economic nations when it comes to the adequacy of out-of-work payments for the short-term unemployed – the report states.
Rising Costs Leave Recipients Struggling
An analysis by the University of New South Wales compared benefit levels to “budget standards,” which reflect the income needed for an acceptable and healthy standard of living. Their findings highlight the gap between current payments and actual living costs.
A single private renter in a capital city would need a 45% increase in total payments to cover essential expenses, while a single public renter in Fitzroy Crossing, a remote town in Western Australia, would require a 67% increase due to the higher cost of food and transport.
Even with two increases in Commonwealth Rent Assistance (CRA) since 2023, over 200,000 of the 1.35 million recipients were still spending more than half of their income on rent as of December 2024.
The rising cost of living has pushed many recipients into severe financial distress, with JobSeeker claimants 14 times more likely to go without a meal at least once a day compared to the general population.
Health and Economic Consequences
The financial strain on JobSeeker recipients has serious implications for health and wellbeing. A report by the Australian Institute of Health and Welfare found that people receiving JobSeeker are significantly more likely to die by suicide than the broader Australian population.
The committee’s analysis underscores the links between financial hardship, mental health, and overall social stability.
Beyond individual wellbeing, underfunded welfare payments have broader economic consequences. The $1.24 return on investment per dollar spent on increasing JobSeeker highlights potential gains in workforce participation and reduced public spending on healthcare and crisis support.
Economic modelling shows that adequate payments would lead to lower rates of hospitalisation, mental health crises, and interactions with the justice system, ultimately reducing strain on government services.
Barriers for Victims of Domestic Violence
One of the report’s key findings relates to the impact of income support on victims of domestic violence. A study commissioned by the committee, led by Social Ventures Australia and Professor Roslyn Russell, found that only 26% of income support recipients successfully leave a violent partner on their first attempt, compared to 45% of wage earners.
Financial dependence remains a major obstacle, preventing many victim-survivors from escaping abusive relationships.
The research also highlights that many survivors do not access emergency financial support when attempting to leave, often due to bureaucratic barriers that make it difficult to claim and maintain payments.
The committee emphasises that reforming the social security system to better support survivors of domestic violence should be a government priority.
