Pensioners, welfare recipients get cash

But welfare groups say it's not enough, renewing calls for an increase to the rate of unemployment support payment Newstart.

The $4.8 billion plan announced on Thursday will cover recipients on Newstart, the disability support pension, carers' allowance, youth allowance, veterans support payments, family tax benefits and Commonwealth senior health card-holders as well as 2.4 million age pensioners.

"It's not for us to tell those Australians how to spend their money, but what we do know from experience is that they will spend that money and that money will encourage economic activity," Treasurer Josh Frydenberg said.

"The more economic activity that we see through the June quarter, in particular, will be important because in the June quarter, just as we've seen in the March quarter, the spread of the coronavirus has had an impact across the economy."

In addition, casual workers will get immediate access to a sickness allowance if they need to self-isolate.

The Newstart allowance, which is being renamed the JobSeeker payment on March 20, is available for people over 22 years old and below pension age.

The Greens, Australian Council of Social Service, and Council on the Ageing say the rate of Newstart should be permanently increased.

"The payment will be welcome short-term relief but it's nowhere near enough," ACOSS said.

"Leading economists urged the government to increase Newstart ongoing to build consumer confidence and to guarantee that the payment would be spent into the real economy."

The Council on the Ageing has welcomed the help for older Australians but pointed out more than half of the people on Newstart are older than 45.

"They need a long-term measure that will ensure they do not continue to go further and further into poverty for years until pension age," COTA said.

Changes will also be made to the pension deeming rate, with an average benefit of $219 a year to age pensioners.

The lower deeming rate will be cut from 1.0 per cent to 0.5 per cent for financial investments up to $51,800 for single pensioners and $86,200 for pensioner couples.

The upper rate, which only impacts about 40 per cent of payment recipients with deemed assets, will decrease from 3.0 per cent to 2.5 per cent.

Under the new rates, a payment recipient whose income is assessed using deeming could receive up to $62 a fortnight for couples ($1612 extra a year), and up to $50 a fortnight for singles ($1300 a year).

The extra money will start flowing through into bank accounts from May 1.

Australian Associated Press