The $750 payments are for casual workers who are forced into isolation with COVID-19, and are not entitled to paid sick leave.
It's designed to stop people with the virus going to work because they can't afford to isolate. The decision was made by the previous Coalition Government to scrap the payment at the end of June.
But Labor has been stubbornly sticking to the deadline, saying the federal budget couldn't afford to support such emergency payments forever.
Anthony Albanese now says the policy reversal is based on the latest advice he's received from the Chief Health Officer and the Health Department.
"I think it's a big call to say that I haven't acted - I haven't acted quickly. What we have seen with this new wave of B4, B5 is a changed health circumstances and when the health circumstances change, we've responded. We've responded collectively together, the Commonwealth with states and territories, and that is appropriate."
The scheme will be available again from the 20th July, and will run until the 30th of September. It will also be backdated to July 1, after expiring two weeks ago.
The Commonwealth and the states and territories will split the cost - estimated to total 780 million dollars.
The nation's leading medical body has praised the decision. Dr Omar Khorshid is President of the Australian Medical Association.
"We need the COVID supports in place so Australians can do the right thing, and they're not put in a situation of having to balance up doing the right thing but not put food on the table, or go to work and pretend they don't have COVID, pretend it's a cold or a flu and put their co workers at risk."
