Post by Banjo on Oct 23, 2013 8:14:50 GMT 7
Days of skimming cash off Australia's poorest must end
The new government and the opposition have a chance to break from past policy failures of successive governments by putting an end to the social security payment merry go round for sole parents and people with disabilities.
In her first major interview after the federal election, former prime minister Julia Gillard conceded that the Newstart Allowance is too low - despite having resisted widespread calls to increase the payment when in office.
On the other hand, Ms Gillard continues to defend her government's decision to drop around 80,000 single parents onto the below-poverty line payment.
Labor's shameful move to cut the parenting payment of single parents when their youngest child turns eight, which took effect on January 1, 2013, came as the Australian Council of Social Service's "Poverty in Australia" report revealed that 25 per cent of children in sole parent families were already living in poverty.
During their Labor leadership contest, both Bill Shorten and Anthony Albanese finally - too late - acknowledged the shift of single parents to Newstart was a mistake. While it's good that former senior ministers, along with the new Social Services Minister Kevin Andrews, have acknowledged the problem, fixing it will not be simple. Payments to sole parents have been cut for the past seven years by successive governments and last year's budget decision was merely the latest episode.
A key question is which problem should be fixed first - the 80,000 affected by the latest changes, or the extra 25,000 single parents previously shifted to Newstart under Labor in 2011 when their child turned 12 instead of 16?
Should it be the 100,000 or so affected by the Welfare to Work policies of the previous Coalition government from 2005-2010? What about the 100,000 people with disabilities languishing on the Newstart Allowance because they were diverted from Disability Support Pension by the same 2005 Welfare to Work policy? Or the additional people who would have received the Disability Support Pension before Labor changed the rules again two years ago?
This is a symptom of a much deeper problem: the inadequacy of the $35-a-day Newstart payment, which hasn't been increased in real terms since 1994, and the growing gap between that payment and pensions for people with disabilities, carers and sole parents.
The difference between Newstart and the Disability Support Pension is now $160 per week.
The switch from a pension to Newstart Allowance is a terrible financial shock. It happens every day to people with disabilities found to be able to work part time, to carers whose caring responsibilities end (often due to the death of a close relative), and sole parents whose youngest child reaches eight years.
Successive governments have cut costs at the expense of people on low incomes by dropping people down to this unbearably low payment.
This is not about supporting workforce participation: people could be kept on the higher payments and required and supported to seek employment.
The payment gap actually discourages transitions to employment among people with disabilities, who fear that they will forego the security of a pension payment if they get a job and lose it later on.
One of the previous government's biggest policy errors was its refusal to increase Newstart in 2009 when it raised pensions by $32 a week.
The new government has the chance to break from these past policy failures now that it has consolidated all income support payments into a single department.
This is something ACOSS had called for, as well as a public review of a system that is in desperate need of reform.
The first step should be an increase of at least $50 a week in Newstart Allowance for single people and sole parents, consistent with the Henry report recommendation.
Further, sole parents with school age children should receive higher family payments to fully restore the payment cuts for those on the lowest incomes.
The government should revisit proposals to simplify the system by introducing a single base rate of payment for all people on income support, with supplements for additional costs such as disability and sole parenthood.
The second step is to strengthen employment services. A majority of people on Newstart Allowance – over 400,000 people - are now unemployed long term. Job Services Australia providers are paid to interview them once every two months plus $500 to $1000 to invest in work experience and training.
The current review of Job Services Australia should result in a more flexible system and greater investment in long term unemployed people, including in programs that are proven to work, such as wage subsidies.
It is encouraging to hear both sides of politics commit to removing barriers to help people with disability back into the workforce.
We agree with Bill Shorten that the 820,000 people on the disability support pension "should not be left in the too-hard basket", and that "it should not be about taking people off pension".
The main issue here is not reluctance among people with disability to work: the labour market comprehensively excludes them.
Reliance on income support in Australia has fallen over the past two decades and is low by international standards. But there is an opportunity ahead of us, as the population ages and employers search for new sources of labour, to end labour market exclusion of people with disabilities, carers, sole parents and long term unemployed people.
This is a joint responsibility of government, people on social security, employers and community service providers.
It's time to stop the welfare payments merry go round and support people out of poverty into paid work.
Dr Cassandra Goldie is CEO of the Australian Council of Social Service
Read more: www.smh.com.au/federal-politics/political-opinion/days-of-skimming-cash-off-australias-poorest-must-end-20131022-2vz3o.html#ixzz2iVH2VWOn
The new government and the opposition have a chance to break from past policy failures of successive governments by putting an end to the social security payment merry go round for sole parents and people with disabilities.
In her first major interview after the federal election, former prime minister Julia Gillard conceded that the Newstart Allowance is too low - despite having resisted widespread calls to increase the payment when in office.
On the other hand, Ms Gillard continues to defend her government's decision to drop around 80,000 single parents onto the below-poverty line payment.
Labor's shameful move to cut the parenting payment of single parents when their youngest child turns eight, which took effect on January 1, 2013, came as the Australian Council of Social Service's "Poverty in Australia" report revealed that 25 per cent of children in sole parent families were already living in poverty.
During their Labor leadership contest, both Bill Shorten and Anthony Albanese finally - too late - acknowledged the shift of single parents to Newstart was a mistake. While it's good that former senior ministers, along with the new Social Services Minister Kevin Andrews, have acknowledged the problem, fixing it will not be simple. Payments to sole parents have been cut for the past seven years by successive governments and last year's budget decision was merely the latest episode.
A key question is which problem should be fixed first - the 80,000 affected by the latest changes, or the extra 25,000 single parents previously shifted to Newstart under Labor in 2011 when their child turned 12 instead of 16?
Should it be the 100,000 or so affected by the Welfare to Work policies of the previous Coalition government from 2005-2010? What about the 100,000 people with disabilities languishing on the Newstart Allowance because they were diverted from Disability Support Pension by the same 2005 Welfare to Work policy? Or the additional people who would have received the Disability Support Pension before Labor changed the rules again two years ago?
This is a symptom of a much deeper problem: the inadequacy of the $35-a-day Newstart payment, which hasn't been increased in real terms since 1994, and the growing gap between that payment and pensions for people with disabilities, carers and sole parents.
The difference between Newstart and the Disability Support Pension is now $160 per week.
The switch from a pension to Newstart Allowance is a terrible financial shock. It happens every day to people with disabilities found to be able to work part time, to carers whose caring responsibilities end (often due to the death of a close relative), and sole parents whose youngest child reaches eight years.
Successive governments have cut costs at the expense of people on low incomes by dropping people down to this unbearably low payment.
This is not about supporting workforce participation: people could be kept on the higher payments and required and supported to seek employment.
The payment gap actually discourages transitions to employment among people with disabilities, who fear that they will forego the security of a pension payment if they get a job and lose it later on.
One of the previous government's biggest policy errors was its refusal to increase Newstart in 2009 when it raised pensions by $32 a week.
The new government has the chance to break from these past policy failures now that it has consolidated all income support payments into a single department.
This is something ACOSS had called for, as well as a public review of a system that is in desperate need of reform.
The first step should be an increase of at least $50 a week in Newstart Allowance for single people and sole parents, consistent with the Henry report recommendation.
Further, sole parents with school age children should receive higher family payments to fully restore the payment cuts for those on the lowest incomes.
The government should revisit proposals to simplify the system by introducing a single base rate of payment for all people on income support, with supplements for additional costs such as disability and sole parenthood.
The second step is to strengthen employment services. A majority of people on Newstart Allowance – over 400,000 people - are now unemployed long term. Job Services Australia providers are paid to interview them once every two months plus $500 to $1000 to invest in work experience and training.
The current review of Job Services Australia should result in a more flexible system and greater investment in long term unemployed people, including in programs that are proven to work, such as wage subsidies.
It is encouraging to hear both sides of politics commit to removing barriers to help people with disability back into the workforce.
We agree with Bill Shorten that the 820,000 people on the disability support pension "should not be left in the too-hard basket", and that "it should not be about taking people off pension".
The main issue here is not reluctance among people with disability to work: the labour market comprehensively excludes them.
Reliance on income support in Australia has fallen over the past two decades and is low by international standards. But there is an opportunity ahead of us, as the population ages and employers search for new sources of labour, to end labour market exclusion of people with disabilities, carers, sole parents and long term unemployed people.
This is a joint responsibility of government, people on social security, employers and community service providers.
It's time to stop the welfare payments merry go round and support people out of poverty into paid work.
Dr Cassandra Goldie is CEO of the Australian Council of Social Service
Read more: www.smh.com.au/federal-politics/political-opinion/days-of-skimming-cash-off-australias-poorest-must-end-20131022-2vz3o.html#ixzz2iVH2VWOn
