By Maeve Bannister and Dominic Giannini in Canberra

WELFARE recipients will soon receive an extra $40 a fortnight and could potentially be allowed to work more hours without losing their benefits. 

Opposition Leader Peter Dutton has clarified the coalition won’t stand in the way of a rise for welfare payments, but will push for changes to increase incentives to work.

The government announced the welfare payment increase in the May budget.

The opposition’s proposed change would maintain the current rate and allow JobSeeker recipients to take home $300 a fortnight, instead of $150, while still receiving full benefits.

Mr Dutton said while the money budgeted for the increase could be better spent on a model that allowed people to work more hours, the Liberals would not oppose it. But he did not expect the coalition’s proposal would be supported in parliament.

“Ultimately if that goes down – as we suspect it will, unfortunately because I think it’s good policy – then we’ll support the government’s increase of $40,” he told reporters in Canberra.

Mr Dutton said a Liberal-National government would not repeal the rate rise if elected.

Social Services Minister Amanda Rishworth said the opposition’s proposal would have unintended consequences and do nothing for the 77 per cent of recipients who don’t access the income-free threshold.

Ms Rishworth also said it would do nothing to address the barriers to employment faced by people on income support.

“Our conservative estimates are that with a doubling of the income-free area, there would be an additional 50,000 people who would become eligible for JobSeeker overnight because the thresholds at which they are cut off would increase,” she said.

“This measure could actually encourage a longer-term reliance on casual work and JobSeeker rather than a transition into the workforce.”

A leading welfare advocacy group said the income free threshold was $300 in 2020/21 before the coalition government cut it and urged the Albanese government to reinstate the higher level.

“The government should be adopting every proposal that would help ensure welfare recipients and low income workers are not living in poverty,” Antipoverty Centre spokesperson Kristin O’Connell said.

“They must urgently increase the income free area to provide better support to the one in five people on unemployment payments who are employed and ensure the lowest income workers are better connected to the safety net.”

Greens acting leader Mehreen Faruqi said the government’s proposed increase was woefully inadequate, and worked out to be an extra $4 per day.

“We will definitely not stand in the way of this increase, but we know that it’s not enough,” she said.

“The government must increase JobSeeker to above the poverty line in this cost of living crisis (because) so many people are being hurt and harmed, people are really struggling to put food on the table.”