The existing $250 fortnightly supplement is due to expire on December 31.
Federal ministers responsible for spending decisions have agreed to reduce and extend the pandemic payments until March 28, The Australian reported on Tuesday.
This timeline ties the boosted payments to the expiry date for JobKeeper wage subsidies.
The supplement, which was originally paid at $550 per fortnight, will probably be reduced to about $150.
Labor is pushing for the supplement to remain at $250 a fortnight, arguing the lower payment takes it below the poverty line
Opposition Social Services spokeswoman Linda Burney plans to speak with welfare groups on the Government’s announcement, to shape Labor’s view on what a permanent increase should be.
“I’m just astounded they have not announced a permanent increase,” she told ABC radio.
The temporary reprieve will not satisfy welfare organisations, business groups and economists calling for a permanent increase to the dole.
The Australian Council of Social Service is urging the government to not cut the payment at Christmas.
“This would be a cruel and damaging mistake, hurting people doing it tough, as well as the country’s economic recovery,” ACOSS chief executive Cassandra Goldie said.
Business Council of Australia chief executive Jennifer Westacott agrees on the need for a permanent 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 are on JobSeeker and other welfare supports.
Once the coronavirus supplement is stripped away altogether, the dole will return to its pre-pandemic rate of $40 a day.
-AAPJump to next article