Sydney will get business support payments up to $10,000 and extra payments for households as its lockdown stretches on, with Scott Morrison and Gladys Berejiklian locking in a federal-state agreement to fund the assistance.

The financial aid, announced on Tuesday afternoon, adds to the previous COVID disaster payment, set up specially for Victoria’s last lockdown. The Prime Minister said Sydney needed extra help as its lockdown had “worsened well beyond what we have recently seen in other states”.

“Help is here and help is on the way as well,” Mr Morrison said, saying it was “in the national interest” to support NSW’s lockdown.

After NSW posted another 89 COVID cases on Tuesday, the state government imposed even stricter rules on Sydney’s south-west, including travel restrictions and regular virus testing obligations on anyone leaving the area for work.

Mr Morrison announced the COVID disaster payment would go to a maximum of $600 a week – up from $500 – for people who’ve lost more than 20 hours a week of work due to the lockdown. The payment will also become ‘recurring’ for each week of the lockdown, so people don’t need to apply again each week.

Scott Morrison and Gladys Berejiklian on Tuesday. Photo: AAP

The Commonwealth will provide that money to those living in areas defined as ‘hotspot’, or that have an average of 30 COVID cases over three days. Many regions currently under lockdown do not meet that threshold, so the NSW government will provide the same level of support to those areas.

There will be no revival of the JobKeeper wage subsidy, but the federal government will fund a new business support payment to companies that can show they’ve lost 30 per cent in turnover. The payments will range from $1500-$10,000 a week, but businesses are “required to maintain their full time, part time and long-term casual staffing level” to get the cash.

The state government will also expand its business grants program, offering up to $15,000 to companies.

The COVID-19 Disaster Payment will now be made available to anyone in NSW who has lost more than 8 hours, or a full day’s work, and it will be increased to up to $600pw from week four of any extended lockdown. pic.twitter.com/s5BrqDHVDn

— Scott Morrison (@ScoMo30) July 13, 2021

The Commonwealth will also provide some business tax relief, as well as kicking in $17.3 million in mental health support for services, including Lifeline, the Butterfly Foundation, headspace and the Kids Helpline.

Mr Morrison said the support would be available to any state that experienced a lockdown of the same severity Sydney currently faces.

“Up until now the Commonwealth has provided the same support to that offered to all other states and territories, consistent with the national approach agreed by national cabinet last month,” he said.

“As the outbreak has worsened well beyond what we have recently seen in other states and territories, it is in the national interest to enable increased assistance, in partnership with the NSW government, for workers, business and households, to ensure the lockdown can be maintained to arrest the latest outbreak.”

Crucially the support will also be available outside lockdown areas.

The state government has been urging people to stay home and not go to work unless their job is considered ‘essential’, but has so far resisted actually defining ‘essential’ or providing a specific list of occupations like Victoria did during its long lockdowns.

Health Minister Brad Hazzard said it would be “very challenging” to create such a specific list, saying it “will be left to the worker and to the employer”.

Canberra had already extended $500 weekly COVID disaster payments to those who have lost work, and removed a liquid assets test that previously applied. However, there were fears some employees might still go to work if that amount was a pay cut on their normal weekly wage.

State Labor MPs had called for more “clarity” on the rules for south-west Sydney, saying extra measures were vital to make sure workers didn’t lose their jobs or get into financial hardship by complying with obligations to be tested twice a week.

Before the federal support was locked in, the NSW government had planned its own state-specific JobKeeper-style wage subsidy, costing it to run for potentially eight weeks.

Labor leader Anthony Albanese had also called for a wage subsidy, to keep workers tied to employers, rather than being laid off.

“If it was good enough for when those circumstances were there, then it’s good enough now,” he said on Tuesday.

“We’re flexible about the mechanism that’s delivered. But we need to make sure that people keep that relationship between workers and employers to keep people in work so that the economic recovery can occur.”

Unions and social advocates have also called for an increase to the JobSeeker welfare payment. Mr Albanese stopped short of explicitly calling for this in Sydney, but noted “there was a very small increase in JobSeeker in the past” and said “we need to make sure that people are looked after during this crisis”.

“Any support should be examined carefully by the government and needs to be of a level which don’t push people into poverty,” he said.

Others have urged the government to reinstate the COVID supplement to JobSeeker, which applied through the pandemic’s early stages.

“They must at least reinstitute the COVID supplement at its full rate of $550 per fortnight, including the removal of waiting periods and partner income tests,” Kristin O’Connell, spokesperson for the Antipoverty Centre, told TND this week.

“People are living precariously. They are in debt from their landlords not giving relief at the end of the last eviction moratorium, rents have skyrocketed at the low end of the market, and the cheap goods we rely on to survive have flown off supermarket shelves.”