Paying JobSeeker recipients weekly instead of fortnightly could help reduce hardship and financial stress without costing taxpayers more, new e61 Institute research shows.
The analysis compared JobSeeker recipients in Australia, who are paid fortnightly, with those in New Zealand, who are paid weekly.
It found that Australian recipients have bigger fluctuations in spending and are more likely to experience financial stress and rely on payday loans than their New Zealand counterparts.
"Our research indicates that allowing JobSeeker recipients to opt-in to weekly payments could reduce financial hardship at little or no extra cost to the taxpayer," said e61 Institute Research Director Dr Gianni La Cava.
"JobSeeker recipients in both countries have significant spending spikes on pay days - but these are much larger for Australians who get paid less frequently.
"We clearly see that weekly payments smooth spending, thereby reducing the risk of running out of money and experiencing financial hardship and stress."
The research found that Australian recipients are more likely to be living hand-to-mouth, defined as having less than $500 in their bank accounts.
Australian recipients are also more likely to experience debit payment failures on their bank accounts - a potential indicator of financial hardship. They are also more likely to rely on cash and turn to high-interest payday loans.
"Less frequent payments appear to be linked to a higher demand for cash and short-term credit in Australia," said Dr La Cava.
"This may partly reflect the greater market presence of payday lenders in Australia but also Australian recipients' greater difficulty in getting from one payday to the next."
The study showed no evidence that more frequent payments encourage frivolous spending. In fact, New Zealand recipients spend less on gambling, alcohol and tobacco despite being paid more often.
"Australia already provides weekly payments to people in cases of extreme financial hardship. Extending this option to all JobSeeker recipients, as New Zealand does, could reduce hardship without the cost of increasing the payment rate," said Dr La Cava.
