The Federal Government has announced $300 million in budgetary funding for three new measures to help job seekers transition into work.

“The Gillard Government will invest an estimated $258 million to enable around 800,000 Australians on income support to earn up to $38 more per fortnight before their payments are affected,” Minister for Employment and Workplace Relations, Bill Shorten, said.

Under this change, Australians on Parenting Payment Partnered, Newstart Allowance, and Widow, Sickness or Partner Allowance will be able to earn $100 per fortnight, up from $62, before their income support is reduced.

This raises what is known as the income free area for the first time in more than a decade. The income free area will, for the first time, be indexed by CPI from 1 July 2015, ensuring its real value remains over time.

“By allowing people to keep more of what they earn, this is a practical investment to give Australians on income support more incentive to stay in or re-enter the workforce,” Mr Shorten said.

About 150,000 Australians on income support who are currently earning more than $62 per fortnight are expected to benefit with an average increase of $19 per fortnight to their payments, or an average of $494 a year. The benefit is available to a further 650,000 people on income support per year if they take up work.

The package will also provide tens of thousands of single parents receiving income support with extra assistance for study and training to help them return to the workforce.