The unemployment benefit with the coronavirus supplement will drop from $1100 to $800 a fortnight in September, Prime Minister Scott Morrison announced on Tuesday.

People will be able to work to earn up to $300 without having their payment reduced under the new format.

The mutual obligation rules requiring people to search for four jobs a month will restart on August 4 and penalties for people refusing a job offer will be reintroduced.

Salvation Army Ballarat team leader John Clonan said the reduced rate would continue to support people experiencing unemployment, but he did not want it to be reduced further.

"It has to be a respectful and dignified income support for people looking for work," he said.

"It is certainly a lot less than the average wage, but it will help people afford rent, utility bills, food and clothing for their families.

"The reality we are dealing with is a human situation... It is a good time to look after each other and support one another."

Job search requirements for people on the unemployment benefit will increase in September when the assets test will also return.

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Centacare Ballarat chief executive officer Tony Fitzgerald said it was good the government had provided some certainty on the payment, which would bring people a sense of relief.

However many may remain concerned about whether the level of the payment is sufficient.

"Our emergency relief program is still very busy with a fourfold increase in requests for assistance over the last two months," Mr Fitzgerald said.

"Forty per cent of those are approaching us for the first time asking for help. We expect that to continue.

"We would expect a significant increase in the number of people engaging with our Job Active program."

Mr Fitzgerald said Centacare would not like to see the JobSeeker payment return to pre-COVID 19 levels.

"That payment was far too low and placed an unacceptable strain on individuals and families," he said.

The permanent JobSeeker rate to take effect from January next year will be announced in the October 6 budget.

Mr Morrison said the government would make further decisions about JobSeeker closer to the end of the year.

Treasurer Josh Frydenberg said more than two million Australians either lost their jobs or had their hours reduced between February and May.

The effective unemployment rate in Australia is 11 per cent.

Mr Clonan encouraged people experiencing financial hardship to reach out to Salvation Army and other agencies for support.

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