Australian students stand to lose A$100 (£56) from their fortnightly income support allocations despite benefiting from Canberra’s move to increase welfare payments by A$50.

Government MPs have confirmed that a widely sought permanent increase in welfare payments will not be restricted to the unemployed, with the three student benefit streams – Youth Allowance, Abstudy and Austudy – also to be included.

The decision means the pandemic-induced welfare bonus for struggling students will not end completely when a special coronavirus supplement expires at the end of March.

Students were an afterthought in the original A$550 fortnightly coronavirus supplement unveiled in March last year, when lobbying led to their inclusion a day later. But the value of the supplement fell to A$250 from 25 September and A$150 from the beginning of this year, as improving economic conditions eased the difficulty of finding work.

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The government has faced widespread pressure to keep payments at elevated levels, with critics saying the increase in the payments in the first place implicitly proved that they had been inadequate for years.

While the A$50 increase has been derided as inadequate and mean-spirited, prime minister Scott Morrison said it was the biggest such boost in 25 years. “We are now confident that at the end of next month…our social safety net can once again be able to provide the support it needs to Australians as we come out of the Covid-19 recession,” he told reporters.

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The mission group, which had been campaigning for students to be acknowledged in any welfare payment increase, said their inclusion was a “welcome boost”.

“Real increases to student income support are very rare,” said executive director Conor King. “An increase is much more important to students’ capacity to study than raising or reducing Hecs-Help [student loan] charges.

“The increase to Youth Allowance, Abstudy and Austudy will not only benefit eligible students, it also benefits taxpayers by reducing the pressure to cease study due to the costs of living.”

But the National Union of Students said the paltry increase had left students and other young people feeling scared. “They’re telling us that they’ll have to go without medication they were able to afford finally during Covid,” national president Zoe Ranganathan tweeted. “They’re preparing to be homeless and hungry.”

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Student income support recipients typically receive around A$100 a fortnight less than unemployed people in similar circumstances and are allowed to earn less through part-time work before their benefits cut out.

While security payments for single people without children are generally below the poverty line, according to a 2020  co-published by UNSW Sydney, the gap is worst for student recipients. Even with the increase, their income support benefits will still be some 44 per cent, or A$200, below the poverty line of around A$460 a week, remaining well below it even if extra allowances for rent and power are factored in.

john.ross@timeshighereducation.com