This paper explores the idea of halving the JobSeeker payment but doubling its frequency from a fortnightly to weekly payment. This could increase cash on hand for recipients without increasing the cost to taxpayers. The paper documents JobSeeker recipient spending patterns and considers the merits of increasing the frequency of the JobSeeker payment (JSP).

Using bank data from Australia (fortnightly payments) and New Zealand (NZ) (weekly payments), the study finds Australian JobSeeker recipients face more financial stress, experience greater spending volatility and withdraw higher rates of cash than NZ recipients. 

Australian recipients can currently only choose weekly payments under cases of extreme financial hardship, such as experiencing homelessness. This means that the capacity to alter the frequency of the JSP already exists. Policymakers may want to extend this feature to all recipients, just like in New Zealand, so as to better manage their cash flow and spending. This could be a less costly alternative to increasing the payment rate while achieving similar goals. 

Key findings

1. The spending patterns of JobSeeker recipients follow regular cycles linked to fortnightly payments.
2. The spending of JobSeeker recipients is more volatile in Australia than in New Zealand because Australian recipients receive income support payments less often.
3. A higher payment frequency is not linked to more discretionary purchases, as Australian recipients spend a greater share of their budget on gambling, alcohol and tobacco than recipients in New Zealand.
4. Australian recipients withdraw relatively high rates of cash compared to recipients in New Zealand and non-recipients in both countries, and this appears to be linked to a need to budget for two weeks rather than one week ahead.
5. Less frequent payments are associated with a higher incidence of financial stress and pay day borrowing among Australian recipients, suggesting that they have more demand for short-term credit to get them to the next pay day.