The federal government has backed down on its plan to force young jobseekers to wait six months before accessing unemployment payments, budget papers will reveal.

Instead, jobseekers under the age of 25 will have to wait four weeks before they receive Newstart or Youth Allowance, an extension of the current one-week waiting period.

The six-month waiting period for under-30s was one of the most controversial savings measures listed in last year’s budget. It was slated to save $1.2bn and encourage more young people into paid employment.

But the policy stalled in the Senate after failing to secure the support of Labor, the Greens and the majority of crossbenchers.



The treasurer, Joe Hockey, indicated that the policy would be scrapped when asked about it early on Tuesday morning.

“You’ll see a changed version of that,” he said. “You’ll see it tonight.”

The backdown is part of the Coalition’s $330m jobs package.

It includes:

$106m in support for jobseekers who face significant barriers to unemployment, including young migrants and people with mental illness;

$212m for a youth transition to work program for people with long-term welfare dependency;