Unemployed Australians are being thrown another temporary lifeline, with JobSeeker coronavirus payments to be extended at a reduced rate until March.

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.

The temporary reprieve will not satisfy welfare organisations, business groups and economists calling for a permanent increase to the dole.

“It is a bit of a relief but it is no solution, we need a permanent solution here, a permanent increase to this allowance,” Business Council of Australia chief executive Jennifer Westacott told ABC radio.

“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.