Federal Budget 2024: Helping hand for one million renters in Anthony Albanese's latest budget - but major blow for Centrelink recipients as government snubs dole increase

Jim Chalmers has extended another helping hand to low-income renters – but has stopped short of raising JobSeeker payments in a Budget balancing act designed to halt rising inflation.

The treasurer unveiled a $1.9 billion support package over five years to increase the maximum rates of Commonwealth Rent Assistance (CRA) by 10 percent in his Budget on Tuesday night – a move that is expected to benefit nearly one million households.

This is on top of a 15 per cent increase in last year’s Budget, marking the first back-to-back increase to CRA in over three decades.

But Dr Chalmers has refused to raise the rate of JobSeeker payments, despite calls for an ‘substantial’ increase to the dole from a government-appointed independent economic advisory committee.

The CRA increase means that maximum rates will be over 40 per cent higher than in May 2022.

The measure is designed to offer relief amid Australia’s worsening rental crisis, with rental vacancy rates now at less than one per cent in all of the country’s capital cities.

‘It’s the first back-to-back increase to Commonwealth Rent Assistance in more than 30 years,’ Dr Chalmers said.

‘And more much-needed help for young people and renters of all ages doing it tough.’

People qualify for the CRA when their rent paid exceeds a certain threshold of their income.

For example, the current rent threshold for a single JobSeeker recipient living alone is $143.40 per fortnight, meaning that they would have to pay just under 20 per cent of their benefit payment on rent before they start to receive the payment.

The government claims rents increased 7.8 per cent over 12 months to the March quarter this year.

But had they not boosted CRA in last year’s budget, rents would have risen by 9.5 per cent over the same period.

This means that for single parents or couples with one or two children the maximum rate of CRA has increased by over $70 per fortnight since May 2022.

Increasing the rental assistance measure was a major recommendation of the Economic Inclusion Advisory Committee’s (EIAC) 2024 report to government.

However, Dr Chalmers has ignored another of the committee’s key recommendations, which was to introduce a 'substantial' increases to the base rates of JobSeeker payment and related working age payments.

The EIAC called for the rates of working age income support and supplements to be increased to 90 per cent of the pension rate.

But now only an extra 5,000 people will now qualify for the highest rate of the dole under new plans that will see total JobSeeker payments swell to $1.4billion over the next four years.

While more people will qualify for the higher rate, the actual payments received have not increased from the $40 a fortnight announced last Budget.

This is largely due to Dr Chalmers’ repeated insistence that the treasury needed to ‘stare down the inflation challenge’.

In short, more cash handouts would have driven inflation higher.

Instead, the Treasurer announced plans to broaden amount of people who qualify for last year’s increased JobSeeker payment to include single people who have been assessed to have a partial capacity to work – in total less than 14 hours a week.

Previously, the only people who qualified for this higher level of payment were people over 55 who had been on a payment for nine continuous months and people with dependents.

The new recipients will receive an increase of at least $54.90 per fortnight, when the new JobSeeker payment is combined with a higher rate of Energy Supplement.

The new qualifying criteria, which will kick in from 20 September 2024, are expected to benefit around 4,700 single recipients and are forecast to cost $41.2 million over the next five years.

But it is estimated that total government expenses related to JobSeeker Income Support are expected to increase by $1.4 billion over the next four years.

This is likely due to the fact the treasury forecasts unemployment to increase from 3.8 per cent in April to 4.5 per cent by 2026/27.

Around 740,800 Australians were receiving JobSeeker payments as of March last year.

The EIAC’s report concluded that JobSeeker and related working age payments, such as Youth Allowance, Austudy, ABSTUDY and Special Benefit, were ‘too low’.

‘Despite the $40 base rate increase delivered in last year’s Federal Budget, people receiving these payments told the Committee that they regularly go without life’s essentials because they simply cannot afford them,’ the report stated.

Dr Chalmers previously said he could not implement all of the committee’s recommendations.

'We take it seriously [but] we can't afford to do every recommendation put to us by that committee,' he said earlier this month.

Social security and welfare still account for the largest area of government spending at $266.7 billion in 2024/25.