Govt defends welfare index methods

[Banker]

THE federal government is standing by having different levels of indexation for the pension compared with the unemployment benefit.

During Senate question time on Tuesday, Australian Greens senator Rachel Siewert urged the government to justify the different indexation methods which will result in pensioners pocketing an extra $17.10 per fortnight but Newstart recipients only $2.90.

The increases come into effect next week.

People on Newstart receive a base sum of $245 a week, which is $225 below the poverty-line level of $470 a week and $132 below the age pension, which is $377 a week.

For years welfare groups and the business community have been calling for Newstart and Youth Allowance to be increased by $50 a week, to stop people falling into the poverty cycle.

Government leader in the Senate Chris Evans said the different indexation methods were in place because the pension was a permanent payment while Newstart was supposed to be a more temporary measure, as people are trained and re-enter the workforce.

The pension increase is indexed against the Male Total Average Weekly Earnings whereas the Newstart Allowance is indexed against the Consumer Price Index.

Senator Rachel Siewert pointed out that 60 per cent of people on Newstart receive the payment for more than 12 months.

From The Australian 11/9/2012

[Banker]

Australian Greens : Pension boost widens the Newstart gap



The Australian Greens said today the gap between pension and allowance payments will grow further next week, with the Government's flawed payment indexation system failing to provide any relief for people on allowance payments such as Newstart.

"The latest indexation of pension payments will see the maximum rate increased by a much needed $17.10 per fortnight, but Newstart will only increase by up to $2.90," Senator Rachel Siewert, Australian Greens spokesperson on Families and Community Services said today.

"This gap between pensions and allowances has been growing for over thirty years and has led to a situation where Newstart is now so low that it creates its own barriers to helping people find work.

"This difference is a result of an antiquated income support system that doesn't cater for the modern needs of our economy and job market.

"In 1980, the payment rate for allowances given to those looking for work was equal to the pension rate, but over the last thirty years Australia's unemployment benefit, which is now called Newstart, has declined to 61% of the aged or disability pension.

"In 2009, in recognition that the Aged Pension was falling behind community living standards, the Government increased the Pension by $32 but Newstart was ignored.

"The increase to Newstart of $2.90 per fortnight will do nothing to prevent unemployed Australians slipping into poverty and in fact will further entrench people in poverty.

"The Government needs to heed the calls from political, business and community groups and commit to increasing the rate of Newstart by $50 per week and changing the indexation system for allowances so that it properly reflects increases in the costs of living," Senator Siewert concluded.

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