RESEARCH PAPER SERIES, 2021–22   21 JANUARY 2022

Australian Government COVID-19 disaster payments: a quick guide

Michael Klapdor and Anthony Lotric

Social Policy

This Quick Guide was first published in June 2021 and updated in August 2021. This update reflects changes to the payments since August 2021.

The Australian Government created two new income support payments to assist individuals affected by state and territory government decisions relating to COVID-19:

• the COVID-19 Disaster Payment for those whose income was affected by state and territory government restrictions on movement or ‘lockdowns’ following COVID-19 outbreaks and

• the Pandemic Leave Disaster Payment for those directed to self-isolate or quarantine due to having COVID-19 or being a close contact of someone who does.

The COVID-19 Disaster Payment is no longer available.

Both payments are unusual as they are offered as National Recovery and Resilience Agency (NRRA) grant payments, unlike other income support or disaster payments paid under a legislative scheme such as the Social Security Act 1991. Other forms of Australian Government financial assistance introduced in response to COVID-19—such as the JobKeeper Payment wage subsidy, Coronavirus Supplement, lump-sum Economic Support Payments and social security eligibility changes (pp. 7–10)—have been implemented via legislation or were extensions of existing programs.

This Quick Guide provides background to both COVID-19 disaster payments setting out their eligibility criteria, payment rates, and administration arrangements.

1 COVID-19 Disaster Payment

The COVID-19 Disaster Payment was announced on 3 June 2021. It was a lump sum payment for those who had lost work or income as a result of a COVID-19 lockdown. The payment was announced one week into a COVID-19 lockdown in Victoria, which commenced on 28 May 2021. This followed calls from the Victorian Government, the Federal Opposition, unions and community service groups for the Australian Government to provide additional support to those unable to earn income during the lockdown.

A lockdown was defined in the Regulations which established the payment as a state or territory government public health order restricting the movement of persons.

A number of Australian Government COVID-19 measures providing income support ended in March 2021, including the JobKeeper wage subsidy and social security measures such as the Coronavirus Supplement and expanded eligibility criteria for both JobSeeker Payment and Youth Allowance (Other). Prior to the 3 June announcement, Australian Government ministers responded to the calls for more assistance for Victorians by citing the level of COVID-19 support already provided to the state and highlighting other COVID-19-related payments: the Pandemic Leave Disaster Payment (PLDP–see below) and the Crisis Payment for National Health Emergency (COVID-19) (a supplementary payment for existing income support recipients).

Initially, the COVID-19 Disaster Payment could only be made for lockdowns which lasted longer than seven days and eligibility was restricted to those whose work or income was affected in the second or subsequent weeks of a lockdown. This condition was removed from 23 July 2021 when the Regulations were amended so the payment was available for lockdowns shorter than seven days (where the other conditions set out below were met). For all lockdowns, applications for the payment could only be made seven days after the lockdown commenced.

Until 28 July 2021, those in receipt of income support payments (such as JobSeeker Payment or a pension) were ineligible for any assistance. Changes announced on that date allowed those in receipt of income support to access a lower-rate COVID-19 Disaster Payment ($200 per week) if they had lost eight or more hours of work, or a full day’s work.

The COVID-19 Disaster Payment was first made available to those in the Greater Melbourne area whose work or income was affected in the period 4–10 June 2021 (the second week of the lockdown that lasted from 27 May 2021 to 10 June 2021). The payment was then made available to those in certain areas of New South Wales whose work or income was affected by the lockdowns commencing at midnight on 25 June 2021 for some parts of Sydney, and from 6pm on 26 June for the Greater Sydney region including the Blue Mountains, Central Coast and Wollongong. The payment was later activated for lockdowns in Victoria, South Australia, Queensland, the Australian Capital Territory (ACT), the Northern Territory and Tasmania. Services Australia’s Pandemic Leave Disaster Payment and COVID-19 Disaster Payment data report to the Senate COVID-19 Committee dated 2 December 2021 details the activation date for each jurisdiction.

On 29 September 2021, the Government announced that the payment would begin to be phased out once states and territories reached 70 and 80 per cent of the population aged over 16 years fully vaccinated against COVID-19. At the 70 per cent vaccinated threshold, automatic renewal of the payment would end, and recipients would need to reapply each week they were eligible. At the 80 per cent threshold, the payment rate would taper down and be withdrawn over a two-week period. All jurisdictions have reached the 80 per cent threshold and the payment is no longer available.

Payment rate

The COVID-19 Disaster Payment had three different rates based on the number of hours of work lost by an eligible recipient and whether or not they were receiving an income support payment:

• $200 per week for those in receipt of an income support payment who lost eight or more hours of work per week or a full day of their usual hours per week (what the person was scheduled to work including shifts of less than eight hours) as a result of the lockdown

• $450 per week for those who lost between eight and less than 20 hours of work per week or a full day of their usual work hours per week as a result of the lockdown and

• $750 per week for those who lost 20 hours or more of work per week as a result of the lockdown.

These were flat rates paid for those who lost work in an eligible lockdown period. There was no pro-rata adjustment for rates in shorter lockdowns—the full amount was paid where an individual was eligible. When first announced, the payment was considered taxable income (p. 5 of the initial Grant Guidelines—login required) but on 29 July 2021 the Prime Minister announced the payment would not be taxed.

The payment rate was reduced once an 80 per cent vaccination rate was reached in the payment recipient’s state or territory of residence. In the first week after this vaccination rate was reached, a $450 payment rate would apply for those who had lost eight or more hours of work (or a full day of their usual hours per week) except for those on income support who could receive a rate of $100. In the second week after the 80 per cent vaccination rate was reached, the payment ended for those on income support and the payment rate was reduced to $320 for all other eligible recipients.

Number of recipients

Data from Services Australia provided to the Senate COVID-19 Committee stated that, as at 2 December 2021, $12.9 billion in COVID-19 Disaster Payments had been paid to 2,380,552 individuals (‘unique customers’).

Eligibility requirements

Qualification requirements for each jurisdiction in which the payment was available were published on the Services Australia website and some of the qualification requirements were included in the regulations providing for the payment (item 492). To receive the final form of the COVID-19 Disaster Payment (reflecting the changes of July 2021 discussed below), a person had to have:

• been aged at least 17 years old

• been an Australian resident or a holder of a visa class permitted to work in Australia

• resided or worked in, or have visited, an area subject to a state public health order for a lockdown and which had been determined by the Commonwealth Chief Medical Officer to be a COVID-19 hotspot (or in another area outside of the hotspot where the state or territory government has agreed to fund the payment)

• been unable to work and have lost income because of the lockdown

• not been receiving a state pandemic payment, PLDP or a state small business payment for the same lockdown period and

• have had insufficient pandemic-related leave entitlements.

Triggers for the Commonwealth Chief Medical Officer to determine a COVID-19 hotspot included a rolling three day average of ten locally acquired cases per day in metropolitan areas or three locally transmitted cases per day in rural and regional areas (note that these were not the only factors considered). Criteria for the Commonwealth Chief Medical Office to declare a COVID-19 hotspot differed from those used by some state and territory health authorities.

Changes to payment conditions from July 2021

When first announced, the COVID-19 Disaster Payment was subject to several conditions differing from those noted above:

• it was only payable for lockdowns that lasted for longer than seven days and the payment was only made to those whose work or income was affected from day eight of a lockdown onwards

• an individual had to live or work in an area declared as a Commonwealth hotspot to be eligible

• payment rates were $325 for those who lost fewer than 20 hours of work and $500 for those who lost 20 or more hours of work as a result of the lockdown

• those with liquid assets such as cash or savings of $10,000 or more were ineligible

• recipients of income support payments were ineligible and

• a new claim had to be made for each eligible seven-day period.

In July 2021, changes were announced to the COVID-19 Disaster Payment in response to the extended lockdown in NSW and a lockdown announced in Victoria—set out in Table 1.

Table 1: chronology of changes to the COVID-19 Disaster Payment

Date of announcement

Change announced

8 July 2021

Liquid assets test waived from week three of the lockdown in NSW

8 July 2021

Payment made available to those who visited a Commonwealth-declared hotspot and were unable to work because they were impacted by a restricted movement order when they returned home to an area outside of the hotspot

13 July 2021

Three changes announced:

• from week four of a lockdown, payment rates would increase from $500 to $600 each week for those who have lost more than 20 hours or more of work, and from $325 to $375 each week for those who had lost between eight and 20 hours of work, or a full day’s shift (could be shorter than eight hours)

• payment recipients would not need to make a new claim for each seven-day period of a lockdown

• payments would be made available to those outside of Commonwealth-declared hotspots whose work or income had been affected by a lockdown (where the state or territory government had agreed to reimburse the Commonwealth for any payments made to those outside a hotspot)

15 July 2021

Further changes announced in response to a new lockdown in Victoria:

• the higher rates of payment would apply from the start of any lockdown period rather than from week four

• the payment would be made available for lockdowns shorter than seven days where a state or territory government had made a commitment to provide ‘significant economic support, for the same lockdown period’

• the liquid assets tests would be removed

28 July 2021

Further changes announced in response to the extended NSW lockdown:

• payment rates would increase from $600 to $750 per week for those who had lost 20 or more hours of work and from $375 to $450 per week for those who had lost between eight and 20 hours of work, or a full day’s work and

• a new $200 per week payment rate for income support payment recipients who had lost eight or more hours of work, or a full day’s work, because of the lockdown. The $200 would be paid in addition to their income support payment

29 July 2021

Prime Minister announced the payment would not be considered taxable income

25 August 2021

Minister for Social Services Anne Ruston announced that parents could count the period they received the COVID-19 Disaster Payment towards the work test for Parental Leave Pay and Dad and Partner Pay

29 September 2021

Treasurer Josh Frydenberg and Minister for Emergency Management and National Recovery and Resilience Bridget McKenzie announced the phase out of the payment when 70 and 80 per cent of those aged 16+ in a particular jurisdiction were vaccinated

End of the Payment

On 29 September 2021, the Government announced that once a state achieved the threshold of 70 per cent of the population aged 16 years or older fully vaccinated (two doses of a COVID-19 vaccine), automatic renewal of the payment would cease, obliging recipients to reapply each week for the payment to confirm that they remained eligible.

When the 80 per cent fully vaccinated threshold was reached, the payment was to be stepped down over a two-week period, and then abolished. For the first week, individuals would receive $450 if they had lost more than eight hours or a full day’s worth of work as a result of a lockdown, and $100 if they were on income support and had lost eight hours or more, or a full day’s work. For the second week, individuals would receive $320 a week if they lost more than 8 hours or a full day’s worth of work, and no payment if they were on income support. The payment would no longer be available from two weeks after the 80 per cent vaccination target was reached. The payments in the two weeks of the phase out were authorised by the Financial Framework (Supplementary Powers) Amendment (Prime Minister and Cabinet Measures No. 9) Regulations 2021.

Table 2 sets out the dates when each state and territory had 70 and 80 per cent of the population aged 16 and over with two doses of a COVID-19 vaccine (as reported in the Department of Health’s COVID-19 vaccination daily rollout updates).

Table 2: dates that states reached the 70% and 80% population aged 16+ fully vaccinated thresholds

State/territory

70%

80%

NSW

6 October 2021

16 October 2021

ACT

7 October 2021

17 October 2021

Vic

20 October 2021

30 October 2021

Tas

19 October 2021

9 November 2021

SA

6 November 2021

26 November 2021

NT

12 November 2021

8 December 2021

Qld

13 November 2021

8 December 2021

WA

14 November 2021

13 December 2021

Note: dates are those reported by the Department of Health as date that the vaccination rate reached the target. This may not be the date that the changes to the payments took effect.

Source: Department of Health, ‘COVID-19 vaccination daily rollout update’, Department of Health website, various.

Differences with previous COVID-19 response payments

Table 3 sets out key differences between the COVID-19 Disaster Payment and two previous financial support programs: JobKeeper Payment and the Coronavirus Supplement (pp. 7–8).

Table 3: differences between COVID-19 financial support programs

COVID-19 Disaster Payment

JobKeeper Payment

Coronavirus Supplement

Payment period

Paid for state and territory government lockdowns where Commonwealth CMO declared a hotspot. Claims opened one week after lockdown commenced. Payment phased out over two weeks once state/territory reached 80% fully vaccinated.

First period from 30 March to 27 September 2020

Second period from 28 September 2020 to 3 January 2021

Third period from 4 January 2021 to 28 March 2021

First period from 27 April to 24 September 2020

Second period from 25 September to 31 December 2020

Third period from 1 January to 31 March 2021

Paid to

Individuals whose work or income affected by lockdown

Sole traders and employers with eligible employees whose revenue had declined

Recipients of JobSeeker Payment, Youth Allowance, Parenting Payment, Austudy, ABSTUDY Living Allowance, Farm Household Allowance and Special Benefit

Eligibility differences

Lockdown/hotspot criteria applied; no employer eligibility criteria; all individuals who lost work or income eligible; income support and Paid Parental Leave/Dad and Partner Pay recipients who lost work eligible

No lockdown/hotspot criteria; employer eligibility criteria; only long-term casual employees eligible; employees receiving Paid Parental Leave/Dad and Partner Pay ineligible

No lockdown/hotspot criteria; no employer/employee criteria; limited to specific income support payments

Eligibility for temporary visa holders?

Yes, for those whose visa conditions permit work

No, must meet social security residency criteria (some New Zealanders and limited temporary visa categories eligible)

No, must meet social security residency criteria (some New Zealanders and limited temporary visa categories eligible)

Weekly payment rates

20 or more hours of work lost: $750

8–20 hours or full day’s work lost: $450

Income support recipient with 8+ hours or full day’s work lost: $200

1st week after 80% vaccination threshold reached: $450 for 8+ or full day’s work lost. $100 for income support recipients with 8+ hours or full day’s work lost.

2nd week after 80% vaccination threshold reached: $325 for 8+ or full day’s work lost. No payment for income support recipients.

First period: $750

Second period: $600 for those who normally worked 20 hours or more; $375 for other eligible employees

Third period: $500 for those who normally worked 20 hours or more; $325 for other eligible employees

First period: $225

Second period: $125

Third period: $75

Taxable?

No

Yes

Yes

Legislation not required

Like most government payments, Services Australia processed claims for the COVID-19 Disaster Payment. Unlike most social security payments, including disaster payments such as the Disaster Recovery Payment and the Disaster Recovery Allowance (which have eligibility criteria set out in the Social Security Act 1991), the COVID-19 Disaster Payment was not legislated and was instead authorised under Regulations issued by the Governor-General. The COVID-19 Disaster Payment was a NRRA grant program administered through Services Australia with eligibility criteria and the claims process set out in grant guidelines (prior to 1 July 2021, the payment was a Department of Home Affairs grant program).

Legislative authority to make the payment was provided through the Financial Framework (Supplementary Powers) Regulations 1997—the authority was added to these Regulations by the Financial Framework (Supplementary Powers) Amendment (Home Affairs Measures No. 2) Regulations 2021 and amended multiple times to implement changes to the payment.

Funding

The COVID-19 Disaster Payment (Funding Arrangements) Act 2021 was passed by Parliament on 24 June 2021. The Act appropriates unlimited funding from consolidated revenue for the COVID-19 Disaster Payment for the period 1 July 2021 to 30 June 2022. The Explanatory Memorandum to the Bill for the Act noted that ‘unspent prior year annual appropriations’ for the Department of Home Affairs were used to fund payments made in June 2021 (p. 2).

When announcing the payment on 3 June 2021, Prime Minister Scott Morrison initially suggested that funding for the payment should be shared with the state and territory governments:

Costs should be shared. Presently the Victorian Government is doing that directly and 100 per cent with the business support they are providing. What I put to the Acting Premier last night was that we should split 50-50 both payments. Go 50-50 on household and go 50-50 on business. Alternatively, the states can agree that in these circumstances they will always provide the business support and we will always provide the household support.

On 4 June 2021, after a National Cabinet meeting, the Prime Minister stated that it was agreed the Australian Government would fully fund the new payment:

… the Commonwealth will provide the direct personal income support, that is through the temporary disaster recovery payment for COVID and that state and territory governments will meet the cost of business support that are as a result of lockdowns that may be put in place by state and territory governments, so it is a very clear allocation of responsibilities.

This statement suggested that the Australian Government would cover the costs of payments made to those on temporary visas with work permits. This differed from arrangements for the PLDP where the state and territory governments are expected to cover the costs of payments made to temporary visa holders (see below).

Under the changes announced on 13 July 2021 (see Table 1 above), payments made to those living or working outside Commonwealth Chief Medical Officer-declared hotspot areas were funded by the relevant state governments. It is unclear why this shared-funding arrangement differs from the principle announced by the Prime Minister on 4 June that the Commonwealth would provide any direct income support.

2 Pandemic Leave Disaster Payment

The Pandemic Leave Disaster Payment (PLDP) was announced on 3 August 2020 after several state governments introduced payments for those without access to paid leave entitlements or Australian Government income support, and who were required to isolate or quarantine due to COVID-19. Examples include the Victorian Government’s Coronavirus (COVID-19) Worker Support Payment, which the PLDP was modelled on and replaced. The PLDP was initially only available in Victoria but the payment has since been made available in all states and territories.

Payment rate

Initially, the payment provided $1,500 for each 14-day period a person must self-isolate, quarantine or care for a person with COVID-19.

On 10 December 2021, the Government announced that a $750 payment would be made for each seven-day isolation, quarantine or care period. The change was made in response to changed state and territory quarantine and isolation requirements. The payment is taxable.

On 8 January 2022, Minister McKenzie and Minister for Social Services Anne Ruston (as Acting Minister for Government Services) announced that two different rates would be introduced from 18 January 2022:

• $750 per seven-day period for those who expected to lose 20 hours of work during their isolation/quarantine/care period and

• $450 per seven-day period for those who expected to lose at least a whole day’s work or up to 19 hours during their isolation/quarantine/care period.

Number of recipients

As at 9 January 2022, a total of 170,000 individuals had received the PLDP (from 261,000 claims) with $254.8 million paid (p. 18). Data is published in the Department of Health’s daily vaccine rollout updates.

Eligibility requirements

The grant guidelines (available through the GrantConnect website, login required) set out the qualification requirements for the PLDP. An individual must:

• be aged at least 17 years old

• be an Australian citizen, permanent resident or a temporary visa holder with the right to work

• be unable to attend work because:

– a health official has told them or a child in their care (via letter, email, SMS or phone), to self-isolate or quarantine at home because they have tested positive for COVID-19 or are a close contact of a person who has tested positive or

– they are caring for someone who has to self-isolate or quarantine due to COVID-19 or

– from 10 January 2022, have registered a positive COVID-19 result from a home-administered rapid antigen test with their state/territory health authority

• have expected to work during the period of isolation, quarantine, or care

• not be receiving an income support payment (including the COVID-19 Disaster Payment)

• not have received or applied for an equivalent state support payment for the same period and

• have insufficient appropriate paid leave entitlements or will exhaust those entitlements during the period of the payment.

From 18 January 2022, a financial hardship test also applies. Individuals with ‘available funds’ of $10,000 or more will be ineligible for the PLDP.

Legislation not required

Like the COVID-19 Disaster Payment, the PLDP is not legislated but authorised under Regulations issued by the Governor-General. The PLDP is structured as a NRRA grant program and administered through Services Australia on behalf of the NRRA (prior to 1 July 2021, the payment was a Department of Home Affairs grant program). Eligibility criteria and the claims process are set out in grant guidelines. Legislative authority to make the payment is provided through the Financial Framework (Supplementary Powers) Regulations 1997—the authority was added to these Regulations by the Financial Framework (Supplementary Powers) Amendment (Home Affairs Measures No. 4) Regulations 2020 and later amended to reflect changes to the payment.

Eligibility for some temporary visa holders

The grant guidelines and the Regulations providing for the payment have specified that citizens, permanent residents, and holders of temporary visas who have the right to work in Australia could be eligible for the payment. This is unusual in the context of social security and disaster payments which generally exclude temporary visa holders. However, the 2020–21 budget measure which provided funding for the PLDP noted that state governments will ‘refund the Commonwealth for any payments made to workers on temporary visas’ (p. 107).

Funding

The 2020–21 Budget provided $34.3 million for the PLDP which was included in the Home Affairs’ ordinary annual services appropriation (pp. 21, 33). The budget measure also estimated $15.9 million in revenue from state and territory governments refunding PLDPs made to temporary visa holders (p. 107). The 2021–22 Budget included an estimated $12.6 million in expenditure on the PLDP from the NRRA’s ordinary annual services appropriation (p. 261). The 2021–22 Mid-Year Economic and Financial Outlook included a further $166.8 billion to continue funding for the PLDP until 30 June 2022 (p. 286).

End of the payment

Treasurer Frydenberg and Minister McKenzie announced on 29 September 2021 that the Pandemic Leave Disaster Payment would continue until 30 June 2022.

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