(Australian Associated Press)
Unemployed Australians will soon receive $100 less per fortnight as coronavirus supplements are extended at a reduced rate.
Prime Minister Scott Morrison is cutting the fortnightly pandemic payment to $150 from the end of December and extending it until March.
Single people on JobSeeker will receive up to $815 a fortnight from the start of next year.
Mr Morrison stressed the need to encourage people into work.
"We cannot allow the lifeline that has been extended to now hold Australia back as we move into the next phases of recovery," he told reporters in Canberra on Tuesday.
The coronavirus supplement initially doubled the $550 dole before being reduced in September.
Mr Morrison is not ruling out increasing the JobSeeker base rate beyond March.
"We haven't made a final decision on that," he said.
"Right now what matters is the supports that will continue to be provided at these elevated and temporary levels."
Opposition Leader Anthony Albanese said it was extraordinary the dole was being docked.
"They've cut both wage subsidies through JobKeeper and they're cutting JobSeeker when the government itself says more people will go on to unemployment benefits between now and Christmas," Mr Albanese said.
"Now is not the time to be withdrawing support from the economy."
The temporary reprieve will not satisfy community organisations, business groups, unions and economists calling for a permanent increase to the dole.
Business Council of Australia chief executive Jennifer Westacott is demanding a long-term solution.
"Why shouldn't unemployed people have the same certainty and predictability, instead of living from three months to three months, and get a decent, adequate allowance that allows them to live with dignity?"
More than 1.5 million Australians on JobSeeker, Youth Allowance and parenting payments are receiving boosted welfare payments.
Once the coronavirus supplement is stripped away altogether, the dole is set to return to its pre-pandemic rate of $40 a day.
Mission Australia chief executive James Toomey said the inflated rate made a huge difference for people struggling to afford housing, education and healthcare.
"We are perplexed the federal government is considering further cuts to income support payments in early 2021," he said.
"Now is the time to provide certainty beyond March and lock in a new, permanent and adequate rate of income support to restore dignity and so that everyone is included in the recovery ahead."
The government is also extending the income-free area, which allows welfare recipients to earn $300 per fortnight without having their payments docked.
The elevated partner taper rate and expanded eligibility for sole traders and the self-employed are also being extended.