The COVID-19 support payments that cost the federal government more than $9 billion since June will end as states and territories hit vaccination targets.
The federal government will make the disaster payments temporary as a jurisdiction hits 70% of people aged 16 years and older fully inoculated, requiring people to reapply for the money every two weeks.
Once a state or territory reaches its 80% target, the payment will end after two weeks.
The shift is expected to discourage states and territories continuing lockdowns after reaching the vaccination targets.
Treasurer Josh Frydenberg, speaking to Sunrise, said the withdrawal of the payments was based on the national plan and Doherty Institute modelling, which envisages lockdowns as unlikely past the 80% vaccination target.
“[Lockdowns] may exist, but they will be temporary, they’ll be targeted, in which case we have the welfare system as the safety net to provide that support,” Frydenberg said.
“It’s supporting around one-and-a-half million people, and that emergency payment needs to come to an end, which is why we have set out a transition plan at 70% and 80%.”
The disaster payments provide $750 if workers have lost at least 20 hours of employment, and $450 a week if their hours have been cut by between eight and 20 hours.
Once states and territories reach the 80% vaccination target, the payments will drop to a flat rate of $450 a week and in the second week $320 a week.
The ACT is currently leading the nation in the vaccine rollout, with 62.24% of the population 16 years and older double-dosed from Tuesday.
The ACT expects to reach its 80% vaccination on October 15, and chief minister Andrew Barr said he was negotiating a financial support package with the commonwealth.
“It is recognised that some industry sectors will require ongoing financial support beyond the time that the lockdown ends,” Barr said.
“This includes businesses in hospitality, tourism, the arts, events and personal services and it may include other more niche industry sectors as well.”
He said the ACT government would continue to support businesses beyond the end of the lockdown, set for October 15.
“There are some businesses, nightclubs for example, that just won’t be reopening until December at the earliest and so they are going to need ongoing support,” Barr said.
“Hence why we have waived liquor licensing fees for example, like nightclubs, for a longer period of time.”