Australians who lose incomes during lockdowns will gain access to a $500 disaster payment for every week they need help under a federal scheme that will start in Victoria and be offered to any state and territory that has to shut down communities during the pandemic.
Prime Minister Scott Morrison will take the scheme to state and territory leaders on Friday at a national cabinet meeting that is likely to formalise the payment, which will be worth $325 for people who worked less than 20 hours before a lockdown.
But the new cash grant comes with a demand for federal control over who is eligible, setting up tensions between Canberra and the states over how to define the “hotspots” where residents and workers qualify for the Temporary COVID Disaster Payment.
Mr Morrison said he wanted the Commonwealth chief medical officer to decide the hotspots rather than leaving this to state and territory government decisions on the suburbs, cities or entire regions that must go into lockdown.
While Mr Morrison said it was up to states and territories to decide their lockdowns, he said the Commonwealth had the right to decide who received money.
“We have no part in the decisions made by state governments and they can choose to do, as they remind me regularly, what they like to do, when they like to do and for how long they like to do it,” he said.
“Where it comes to federal taxpayer money in place, we will be relying on the medical advice of the Chief Medical Officer.”
Victorians will be able to apply for the Temporary COVID Disaster Payment from Tuesday and must “self-declare” their eligibility for the grant, which will only be available if a lockdown lasts longer than one week.
The new payment will be $500 a week for people who normally work more than 20 hours a week and $325 a week for people who normally do less than 20 hours.
It will only be available for people who cannot work and have less than $10,000 in liquid assets, with the government considering cash. It cannot be combined with other welfare or coronavirus support payments from the federal government.
The payment will only go to people who are at least 17 years of age and who are Australian citizens, residents or visa holders with a right to work here.
The government will not expect people to use their annual leave during the lockdown, but wants them to try first for help from their employers such as sick leave. The money will come with an understanding there may be “retrospective compliance activity” to check that applicants are being honest.
The Prime Minister stressed a lockdown alone would not be enough to trigger the federal money, raising the prospect that a state could go into lockdown without its citizens getting federal money. To receive the payment, people must declare they have lost income and must live or work in a declared hotspot under a federal coronavirus hotspot definition.
Mr Morrison said Chief Medical Officer Paul Kelly is expected to declare Greater Melbourne a hotspot for the next seven days.
Details of who will pay for the support will be finalised in tomorrow’s national cabinet meeting, but the Prime Minister said either the Commonwealth will cover wages support for workers while the relevant state or territory provides money to businesses, or they can equally share the cost for both.
“What matters is that businesses get the support they need and households get the support they need and the politicians don’t need to have a discussion in public about how that is going to get done,” Mr Morrison says.
The Victorian government said states should be responsible for handling business support, while income support was the responsibility of the Commonwealth.