Residents who face weeks without power in storm-hit parts of Victoria will be eligible for a weekly payment of up to $1680.
Acting Premier James Merlino announced the funds on Thursday, a week after storms brought down trees, caused major flooding and destroyed powerlines across the east of the state.
“I’ve lived in this region my whole life. I’ve never seen the extent of the damage here in the Dandenong Ranges,” he told reporters in Olinda.
He said 7000 households remain without power, with the worst-affected in the Dandenong Ranges expected to be off the grid until July 10.
“The depth of winter and weeks and weeks without power. This is an unprecedented emergency,” Mr Merlino said.
He said the current disaster recovery funding arrangements with the Commonwealth don’t cover the situation.
Instead, a Prolonged Power Outage Payment of up to $1680 per week will be created for all eligible households without power from Thursday.
The payment will be administered by Ausnet and will help families buy the basics and find alternative accommodation for the next three weeks.
Mr Merlino said the payment is expected to be jointly funded by the state and federal government.
He confirmed Bushfire Recovery Victoria will take the lead in co-ordinating the clean-up and the recovery, while members of the Australian Defence Force will arrive in the Dandenong Ranges and Traralgon, in the Gippsland region, on Thursday to assess the damage.
A further request for support will then be made.
Meanwhile, nearby residents of three storm-hit Yarra Ranges suburbs have been told not to drink tap water until further notice.
The Department of Health issued an urgent warning on Wednesday morning to people who live, work or are in Kallista, Sherbrooke or The Patch not to drink tap water, even if it is boiled, due to contamination.
It is expected the warning will stay in place for two more days.
Two people died in the dangerous storms last week, with minor flood warnings still current for the Latrobe, Thomson and Yarra rivers.