National Welfare Rights Network PreBudget Submission '18-'19
Dec 29, 2017 13:33:01 GMT 7
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National Social Security Rights Network Pre-Budget Submission 2018 – 2019
NSSRN Pre-budget Submission 2018-2019
1. Overview and summary of recommendations ............................................................................... 3
2. Social Security spending priority: Increase to unemployment payments ...................................... 3
3. Areas requiring urgent reform ........................................................................................................ 5
i. Community Development Programme ....................................................................................... 5
ii. Work for the Dole ....................................................................................................................... 8
iii. Youth Jobs PaTH .......................................................................................................................... 8
iv. Income management and Cashless Debit Card schemes ........................................................... 9
4. 2017-2018 Budget Measures ........................................................................................................ 11
5. Conclusion ..................................................................................................................................... 12
6. Contact Details .............................................................................................................................. 12
1. Overview and summary of recommendations
The National Social Security Rights Network (NSSRN) is the peak body for community legal centres (CLCs) in Australia which provide specialist legal assistance in relation to social security and family assistance law, policy and administration.
The NSSRNs budget submissions strive to inform the Federal Governments decision-making about the Budget by focussing on priority areas for reform in social security and family assistance law and policy.
The NSSRN urgently calls for an increase in the rate of all social security unemployment payments. We have made this the focus of our 2018-2019 Pre-Budget Submission, and our key priority for the forthcoming budget year, to ensure an adequate standard of living for this group of social security recipients. In our experience, many people looking for work face additional pressures, such as living with a disability or having caring responsibilities. We call for an increase in payments as a necessary course of action to address growing inequality in our society.
The NSSRN makes this call with an understanding that increased government spending on these allowances will likely necessitate cost savings in other areas. We therefore call for the urgent overhaul of several current measures applied to those on unemployment payments. These measures have and will continue to require significant government investment and yet are not achieving their intended aims. In particular, we call for the urgent overhaul of:
Community Development Programme; Work for the Dole; Youth Jobs PaTH; and all income management schemes, including the Cashless Debit Card.
Contrary to their intended objectives, these measures have not assisted people to find sustainable employment, improved their access to opportunities for meaningful participation, or improved the situation of people who need income support. We call on the government to step away from these measures to allow for greater investment in payment rates.
The NSSRN also remains opposed to a number of last years budgetary measures that are currently under consideration by the Senate.
2. Social Security spending priority: Increase to unemployment payments
There is an urgent need to increase unemployment payments to cover basic living costs. These payments include Newstart Allowance, Youth Allowance (Other), Special Benefit and Widow Allowance.
Reports from late 2016 show that 57.3% of people below the poverty line relied upon social security as their main income.
1
Newstart Allowance, for a single adult unemployed person, is 40% of the minimum wage, which in itself is around 40% of the national average weekly earnings.
2
Newstart Allowance is also currently $170 per week less than pension payments. The payment rate is grossly inadequate and has had no substantial increases in real terms since mid-1990s.
3
Our member CLCs provide legal assistance to some of the most socio-economically disadvantaged individuals in Australia. This includes helping people receive the social security payment they are entitled to and resolve problems with the payments, such as challenging erroneous debts. Whilst this support is critical, it cannot resolve the issue that payment rates are not sufficient to meet the basic standard of living cost.
Our members regularly assist people on income support who cannot afford adequate housing, necessary medical treatment (particularly dental assistance), or run out of money for food. Our clients rely on social security payments to meet these basic living expenses. The current low rate of many of these unemployment payments undermines the right to social security and an adequate standard of living.
4
The payment rates also undermine the likelihood of achieving the intended outcome of social security policy that focuses on reducing unemployment. In addition to having insufficient resources to engage in job search activities, the stress of being unable to pay bills, having unstable housing and food security, is not conducive to positive participation in job search activities.
Inadequate social security leads to greater costs in other areas of government spending such as health care. A recent report from the Australian Health Policy Collaboration at Victoria University found that low socio-economic status is a major risk factor for poor health.
5
This research has shown that the poorest 10 million Australians are far more likely to die of preventable illnesses.
6
The NSSRN calls for an increase to the single payment rate of unemployment payments to ensure that those who are most vulnerable and disadvantaged have adequate financial support. Recent research by the UNSW Social Policy Research Centre (SPRC) has found that unemployment payments need to be increased by $96 per week in order to meet the basic standard of living cost.
7
A combination of the following measures would raise the base rate of unemployment payments to the current living budget standards identified by this research:
- raising the single rate of unemployment payments by $75 per week; - increasing Rent Assistance by 30%; and - applying indexation of these payments to the pension and benefit cost of living index, CPI and wage movements.
Increases to the base rates of unemployment payments will have a number of important flow on effects to other groups of people experiencing disadvantage. For example, we have previously advocated for an increase to the Crisis Payment, available to social security recipients who experience financial and personal hardship. Crisis payments are particularly important for victims of domestic violence who experience severe financial hardship in fleeing a violent relationship and urgently require extra funds in order to secure safe alternative accommodation. The Australian Council of Trade Unions has recently estimated that the average cost of leaving a violent relationship is $18,000. Currently, the one off crisis payment is equal to a weeks pay at a persons existing income support payment rate.
8
An increase in the base payment rate would improve the level of crisis payment available to meet the cost of staying safe at the crucial time.
3. Areas requiring urgent reform
The NSSRN calls on the government to abolish or reform a number of unsuccessful measures designed to assist social security recipients obtain work. These measures have not demonstrated any improvements in job prospects for those participating in the schemes and therefore represent a poor return on investment. Examples of such measures include the Community Development Programme, Work for the Dole, Youth Jobs PaTH scheme, and income management and the Cashless Debit Card schemes.
i. Community Development Programme
The NSSRN calls for the urgent reform of the Community Development Programme (CDP) across parts of remote Australia. Introduced in July 2015, the CDP is the Australian governments remote employment and community development service for unemployed jobseekers who must engage in job activity requirements to receive their unemployment payments.
9
The program, which includes approximately 35,000 social security recipients, 83% of whom are Indigenous, requires participants to complete 25 hours of work per week to continue receiving regular payments.
10
These hours are far greater than required by jobseekers in non-remote areas who participate in the jobactive employment services programme. The harsher non-compliance measures in the CDP scheme have left many vulnerable people with no income support. Since its introduction, the CDP program has seen a 740% increase in financial penalties compared with the preceding scheme, the Remote Jobs and Communities Programme (RJCP) which had less onerous obligations and greater flexibility over choice of activity.
Unlike the jobactive work-based activities, CDP providers receive service fees based on attendance at job activities. Fees are paid in three circumstances: if the jobseeker attends for their activity, or the jobseeker does not attend but has a reasonable excuse or the provider recommends that a penalty be imposed and then re-engages them within 2 weeks.
11
This system of financial incentive makes it unlikely for CDP providers to exercise discretion when recording non-attendance.
The following graph12 compares all financial penalties applied in the RJCP/CDP and the jobactive scheme. It shows the rapid increase in penalties since the introduction of the CDP in July 2015.
The CDP has also resulted in Indigenous people receiving more financial penalties than nonIndigenous people on income support. For instance, in June 2017 quarter, 58% of all penalties applied to Indigenous people.13 The following graph14 represents financial penalty data since March 2008 and illustrates the sharp increase in penalties for Indigenous people following the commencement of the CDP:
This disproportionate impact of the CDP on Indigenous Australians runs counter to Australias international human rights obligations under the Convention on the Elimination of Racial Discrimination to prohibit and eliminate racial discrimination in all its forms.
15
The staggering escalation of penalties is impoverishing many Indigenous people living in remote communities. The CDP has created additional financial and social burdens for many individuals, which affects their families and their communities. For example, the increase in penalties has reduced food security in CDP affected communities. The Arnhem Land Progress Association has stated that since the commencement of the CDP, communities stores have recorded a significant decrease in food sales, coinciding with an immediate and meteoric increase in financial penalties applied to CDP participants.
16
The model has been linked to increased crime and poverty across CDP communities.
17
The programme is not meeting the intended policy outcome of assisting social security recipients into paid employment. This is particularly the case for those CDP participants who must engage in menial and meaningless work activities in remote areas with scarce job opportunities. The CDP does not address the lack of work and education opportunities experienced by many Indigenous people living in this country. Nor does it address the protracted issues of dispossession, poverty, and lack of accessible health care.
We support the work of Aboriginal Peak Organisations NT (APONT) that has developed a community driven alternative.
18
Their proposal, the Remote Development and Employment Scheme (RDES), aims to achieve sustainable change in remote communities by ensuring that Indigenous people have more meaningful control over their lives. The RDES is place based, community driven, and establishes a framework for long term collaborative effort across governments, employers and Indigenous organisations to increase economic opportunities in remote communities.
19
The proposal emphasises job creation, incentives to participate (rather than penalties) and recognising cultural priorities. It would be managed by an independent Indigenous led board with local governance bodies.
We urge the Government to urgently abolish or, at the very least, reform the CDP along APONTs recommended model.
ii. Work for the Dole
The current Work for the Dole scheme for jobactive participants has operated since July 2014. It was initially costed at around $1 billion over three years. The 2017-2018 Budget extended with program with some changes. From 1 January 2018, jobactive providers will administer Work for the Dole activities, rather than contracted Work for the Dole coordinators.
20
The NSSRN has held long-standing concerns over the effectiveness of the program. An evaluation report of Work for the Dole 2014-2015 found that the scheme improved the probability that an unemployed person would find a job by just 2 percentage points and off a low base.
21
Previous independent reports on earlier versions of the scheme had found that Work for the Dole participants spent longer amounts of time on welfare payments, than those not required to participate.
22
That research, funded by the Commonwealth Department of Family and Community Services, was consistent with international evidence on the ineffectiveness of work-based programs for the unemployed. Reports suggest that, like the Community Development Program, jobs available in Work for the Dole predominantly involve menial tasks requiring low-supervision.
23
They therefore do not offer significant skill development for those seeking ongoing work.
The NSSRN also holds a number of concerns regarding safety on Work for the Dole work sites. In April 2016, Josh Park-Fing, an 18 year old, died while participating in Work for the Dole.
24
His death highlighted significant issues on safety and lack of proper workplace training. The tragedy also highlighted the inadequacy of the Work for the Dole insurance scheme, which offers compensation amounts that are much lower than workers compensation schemes.
25
The NSSRN urges the government to do away with Work for the Dole schemes. They do not increase the long term availability of jobs. Providing better training opportunities to people who have the support of adequate unemployment payments is more likely to improve employment outcomes and the wellbeing of people on income support.
iii. Youth Jobs PaTH
The NSSRN calls for the overhaul of the Youth Jobs PaTH scheme for unemployed young people. This $750 million scheme involves employability skills training for young people followed by a 4-12 week internship of between 30-50 work hours per week. The scheme provides a $1000 financial incentive to businesses to trial a young person in these internships. During this time, the young person
receives $200 on top of their fortnightly social security payments. Businesses receive an additional $10,000 payment over 6 months if they hire a young person after the trial has ceased.
26
The NSSRN does not support this internship scheme. The Department of Employment released figures in October 2017 that showed that nationally 2,545 internship placements had commenced to date with 1,450 businesses.
27
Of concern, is that most internship agreements were for the maximum 50 hours per week participation.
28
There have been reports of businesses exploiting the model, and forcing young people to work in excess of the maximum 50 hours. The Department of Employment has suspended at least one business due to these breaches.
29
Discounting those internships still underway, the Department of Employment figures show that only 39% of interns received jobs at the end of their internship.
30
The remainder completed the internship without any job offer, had their internship end early, or for unknown reasons had their internship end. It offers little prospect of employment at the completion of the internship.
This scheme leaves young people vulnerable to exploitation and entices young people to work for long hours for insufficient payments. Young jobseekers participating in these internships may earn the equivalent of $4-$6 per hour for their work. Coupled with their social security payment, these young people are paid less than minimum wage. They receive no superannuation benefit, and do not receive penalty rates or casual loading.
The Youth Jobs PaTH scheme benefits participating businesses much more than young people. We call for the government to abandon the scheme, and invest the programmes funds into an adequate level of income support combined with targeted and flexible employment training for young people that is more likely to lead to sustainable employment.
iv. Income management and Cashless Debit Card schemes
In our 2015-2016 Pre-Budget Submission, the NSSRN called for the abolishment or reform of mandatory income management schemes across the country. Our position has not changed. There is no hard evidence that these schemes have a positive impact on participating individuals. On the contrary, there is evidence that income management has had a negative impact on the health and wellbeing of these communities, particularly children. Shockingly, recent research has shown that that restricting welfare payments reduced birthweight by over 100 grams and increased the probability of low birthweight by around 30 percent.
31
The report also found that school attendance fell by an average of 4 per cent across the income managed communities.
32
An urgent response to this crisis is required.
There are a growing number of income management measures in this country. As of August 2017, 25,009 people were on income management. The schemes disproportionately target Indigenous communities: an overwhelming 79% of people on income management are Indigenous.
33
There are several legislated income management schemes.
34
A person subjected to income management has 50 to 70 per cent of their social security payments quarantined into a Centrelink administered account to spend on priority needs. The remaining amount is paid into the persons bank account. Many have their income-managed benefits allocated to a BasicsCard, which is similar to a bank issued debit card without the ability to withdraw cash.
In recent years, legislation has introduced a Cashless Debit Card in certain trial communities.
35
This operates in a similar way to other income management schemes. The majority of a persons social security payment is quarantined onto a Cashless Debit Card.
36 The amount on the card cannot be accessed as cash or used to buy alcohol, drugs or gambling. The Cashless Debit Card also disproportionately affects Indigenous communities. The NSSRN expressed strong opposition to the introduction and the recent proposed expansion of the Cashless Debit Card.
37
In our view, these racially discriminatory measures disempower communities and further entrench issues of poverty and displacement. Some Indigenous participants on the Cashless Debit Card consider it akin to "ration days".
38
The scheme exacerbates financial stress for people already struggling to meet basic needs, by limiting control over their finances.
39
We draw attention to recent observations and recommendations made by the United Nations Committee on Economic, Social and Cultural Rights (CESCR) in respect of income management in Australia. The CESCR expressed concern about Australias mandatory income management schemes and the disproportionate affect these schemes have on our Indigenous population.
40
The Committee ultimately recommended that the Australian government consider maintaining only an opt-in income management scheme with appropriate oversight of decision making and monitoring, and review existing and envisaged conditionalities for eligibility to social assistance and unemployment benefits as well as penalties for non-compliance, and ensure that all beneficiaries receive adequate benefits, without discrimination.
41
The cost of income management schemes are significant. In 2015, the Northern Territory regime cost an estimated $7,500 per person.
42
In 2017, the Cashless Debit Card trial reportedly cost the equivalent of $10,000 per individual.
43
Despite this high cost, evaluations of income management schemes have not demonstrated that they effectively achieve their intended objectives.
44
We call for the abolishment of mandatory income management schemes across the country. The schemes divert funds away from legitimate purposes such as addressing inadequate levels of income support, or programs and services that could be used to better help overcome chronic health conditions, accessibility to housing, and underfunded education provision.
4. 2017-2018 Budget Measures The NSSRN remains opposed to a number of social security measures proposed in last years Budget that are still before Parliament. These measures are contained in a number of bills currently before the Senate.
The NSSRN made a submission on each of these bills to the Senate Standing Committee into Community Affairs. In summary, we are opposed to the following measures:
- Social Services Legislation Amendment (Welfare Reform) Bill 2017: o New Targeted Compliance Framework; o Drug testing trial and related measures; o Removal of drugs/alcohol dependence as a reasonable excuse for non-compliance purposes; o Delayed start to payments, including removal of intent to claim provisions; o Cuts to bereavement payments; and o New activity requirements for unemployed people aged 55 to 59.
- Social Services Legislation Amendment (Payment Integrity) Bill 2017: o Changes to residency requirements for Aged and Disabilities pensions; o Restricting access to overseas payments for pensions; o Increasing the liquid assets waiting period; and o Tightening FTB Part A income test for higher earners.
- Social Services Legislation Amendment (Better Targeting Student Payments) Bill 2017: o Restrictions to Relocation scholarships; and o Cuts to Education Entry Payment and Pensioner Education Supplement.
Our submissions to the Senate Committee explain and outline these concerns in detail. Our submissions are available through searching the specific bill on the Committees website.
45
5. Conclusion
There are ongoing efforts to reduce spending on social security. However, many of these costreducing measures are eroding the safety net in our society for those experiencing hardship, unexpected changes in their circumstances, or the onset of disability or illness.
Our international human rights obligations compel us to provide a minimum standard of living for everyone in our community.
46
The living budget standards provide the evidence base for the minimum level of social security payment rate needed to reach this standard.
The consequential benefits of providing this minimum standard are immense: income security improves well-being, physical health, and provides greater opportunity to live an enriched social and economic life. These benefits lead to cost reduction in health and social services spending and a better society for all.
We urge the Government to recognise the benefits of investing in social security measures that work, rather than wasting money on those that dont, or even worse make it more difficult for people who are already struggling to find work. We urge the government to implement our recommendations in the area of social security.
6. Contact Details
Joni Gear Legal Project Officer National Social Security Rights Network T: 0448 007 428 E: rpo@nssrn.org.au
Leanne Ho Executive Officer National Social Security Rights Network T: 0448 007 201 E: eo@nssrn.org.au
www.nssrn.org.au/publications/
NSSRN Pre-budget Submission 2018-2019
1. Overview and summary of recommendations ............................................................................... 3
2. Social Security spending priority: Increase to unemployment payments ...................................... 3
3. Areas requiring urgent reform ........................................................................................................ 5
i. Community Development Programme ....................................................................................... 5
ii. Work for the Dole ....................................................................................................................... 8
iii. Youth Jobs PaTH .......................................................................................................................... 8
iv. Income management and Cashless Debit Card schemes ........................................................... 9
4. 2017-2018 Budget Measures ........................................................................................................ 11
5. Conclusion ..................................................................................................................................... 12
6. Contact Details .............................................................................................................................. 12
1. Overview and summary of recommendations
The National Social Security Rights Network (NSSRN) is the peak body for community legal centres (CLCs) in Australia which provide specialist legal assistance in relation to social security and family assistance law, policy and administration.
The NSSRNs budget submissions strive to inform the Federal Governments decision-making about the Budget by focussing on priority areas for reform in social security and family assistance law and policy.
The NSSRN urgently calls for an increase in the rate of all social security unemployment payments. We have made this the focus of our 2018-2019 Pre-Budget Submission, and our key priority for the forthcoming budget year, to ensure an adequate standard of living for this group of social security recipients. In our experience, many people looking for work face additional pressures, such as living with a disability or having caring responsibilities. We call for an increase in payments as a necessary course of action to address growing inequality in our society.
The NSSRN makes this call with an understanding that increased government spending on these allowances will likely necessitate cost savings in other areas. We therefore call for the urgent overhaul of several current measures applied to those on unemployment payments. These measures have and will continue to require significant government investment and yet are not achieving their intended aims. In particular, we call for the urgent overhaul of:
Community Development Programme; Work for the Dole; Youth Jobs PaTH; and all income management schemes, including the Cashless Debit Card.
Contrary to their intended objectives, these measures have not assisted people to find sustainable employment, improved their access to opportunities for meaningful participation, or improved the situation of people who need income support. We call on the government to step away from these measures to allow for greater investment in payment rates.
The NSSRN also remains opposed to a number of last years budgetary measures that are currently under consideration by the Senate.
2. Social Security spending priority: Increase to unemployment payments
There is an urgent need to increase unemployment payments to cover basic living costs. These payments include Newstart Allowance, Youth Allowance (Other), Special Benefit and Widow Allowance.
Reports from late 2016 show that 57.3% of people below the poverty line relied upon social security as their main income.
1
Newstart Allowance, for a single adult unemployed person, is 40% of the minimum wage, which in itself is around 40% of the national average weekly earnings.
2
Newstart Allowance is also currently $170 per week less than pension payments. The payment rate is grossly inadequate and has had no substantial increases in real terms since mid-1990s.
3
Our member CLCs provide legal assistance to some of the most socio-economically disadvantaged individuals in Australia. This includes helping people receive the social security payment they are entitled to and resolve problems with the payments, such as challenging erroneous debts. Whilst this support is critical, it cannot resolve the issue that payment rates are not sufficient to meet the basic standard of living cost.
Our members regularly assist people on income support who cannot afford adequate housing, necessary medical treatment (particularly dental assistance), or run out of money for food. Our clients rely on social security payments to meet these basic living expenses. The current low rate of many of these unemployment payments undermines the right to social security and an adequate standard of living.
4
The payment rates also undermine the likelihood of achieving the intended outcome of social security policy that focuses on reducing unemployment. In addition to having insufficient resources to engage in job search activities, the stress of being unable to pay bills, having unstable housing and food security, is not conducive to positive participation in job search activities.
Inadequate social security leads to greater costs in other areas of government spending such as health care. A recent report from the Australian Health Policy Collaboration at Victoria University found that low socio-economic status is a major risk factor for poor health.
5
This research has shown that the poorest 10 million Australians are far more likely to die of preventable illnesses.
6
The NSSRN calls for an increase to the single payment rate of unemployment payments to ensure that those who are most vulnerable and disadvantaged have adequate financial support. Recent research by the UNSW Social Policy Research Centre (SPRC) has found that unemployment payments need to be increased by $96 per week in order to meet the basic standard of living cost.
7
A combination of the following measures would raise the base rate of unemployment payments to the current living budget standards identified by this research:
- raising the single rate of unemployment payments by $75 per week; - increasing Rent Assistance by 30%; and - applying indexation of these payments to the pension and benefit cost of living index, CPI and wage movements.
Increases to the base rates of unemployment payments will have a number of important flow on effects to other groups of people experiencing disadvantage. For example, we have previously advocated for an increase to the Crisis Payment, available to social security recipients who experience financial and personal hardship. Crisis payments are particularly important for victims of domestic violence who experience severe financial hardship in fleeing a violent relationship and urgently require extra funds in order to secure safe alternative accommodation. The Australian Council of Trade Unions has recently estimated that the average cost of leaving a violent relationship is $18,000. Currently, the one off crisis payment is equal to a weeks pay at a persons existing income support payment rate.
8
An increase in the base payment rate would improve the level of crisis payment available to meet the cost of staying safe at the crucial time.
3. Areas requiring urgent reform
The NSSRN calls on the government to abolish or reform a number of unsuccessful measures designed to assist social security recipients obtain work. These measures have not demonstrated any improvements in job prospects for those participating in the schemes and therefore represent a poor return on investment. Examples of such measures include the Community Development Programme, Work for the Dole, Youth Jobs PaTH scheme, and income management and the Cashless Debit Card schemes.
i. Community Development Programme
The NSSRN calls for the urgent reform of the Community Development Programme (CDP) across parts of remote Australia. Introduced in July 2015, the CDP is the Australian governments remote employment and community development service for unemployed jobseekers who must engage in job activity requirements to receive their unemployment payments.
9
The program, which includes approximately 35,000 social security recipients, 83% of whom are Indigenous, requires participants to complete 25 hours of work per week to continue receiving regular payments.
10
These hours are far greater than required by jobseekers in non-remote areas who participate in the jobactive employment services programme. The harsher non-compliance measures in the CDP scheme have left many vulnerable people with no income support. Since its introduction, the CDP program has seen a 740% increase in financial penalties compared with the preceding scheme, the Remote Jobs and Communities Programme (RJCP) which had less onerous obligations and greater flexibility over choice of activity.
Unlike the jobactive work-based activities, CDP providers receive service fees based on attendance at job activities. Fees are paid in three circumstances: if the jobseeker attends for their activity, or the jobseeker does not attend but has a reasonable excuse or the provider recommends that a penalty be imposed and then re-engages them within 2 weeks.
11
This system of financial incentive makes it unlikely for CDP providers to exercise discretion when recording non-attendance.
The following graph12 compares all financial penalties applied in the RJCP/CDP and the jobactive scheme. It shows the rapid increase in penalties since the introduction of the CDP in July 2015.
The CDP has also resulted in Indigenous people receiving more financial penalties than nonIndigenous people on income support. For instance, in June 2017 quarter, 58% of all penalties applied to Indigenous people.13 The following graph14 represents financial penalty data since March 2008 and illustrates the sharp increase in penalties for Indigenous people following the commencement of the CDP:
This disproportionate impact of the CDP on Indigenous Australians runs counter to Australias international human rights obligations under the Convention on the Elimination of Racial Discrimination to prohibit and eliminate racial discrimination in all its forms.
15
The staggering escalation of penalties is impoverishing many Indigenous people living in remote communities. The CDP has created additional financial and social burdens for many individuals, which affects their families and their communities. For example, the increase in penalties has reduced food security in CDP affected communities. The Arnhem Land Progress Association has stated that since the commencement of the CDP, communities stores have recorded a significant decrease in food sales, coinciding with an immediate and meteoric increase in financial penalties applied to CDP participants.
16
The model has been linked to increased crime and poverty across CDP communities.
17
The programme is not meeting the intended policy outcome of assisting social security recipients into paid employment. This is particularly the case for those CDP participants who must engage in menial and meaningless work activities in remote areas with scarce job opportunities. The CDP does not address the lack of work and education opportunities experienced by many Indigenous people living in this country. Nor does it address the protracted issues of dispossession, poverty, and lack of accessible health care.
We support the work of Aboriginal Peak Organisations NT (APONT) that has developed a community driven alternative.
18
Their proposal, the Remote Development and Employment Scheme (RDES), aims to achieve sustainable change in remote communities by ensuring that Indigenous people have more meaningful control over their lives. The RDES is place based, community driven, and establishes a framework for long term collaborative effort across governments, employers and Indigenous organisations to increase economic opportunities in remote communities.
19
The proposal emphasises job creation, incentives to participate (rather than penalties) and recognising cultural priorities. It would be managed by an independent Indigenous led board with local governance bodies.
We urge the Government to urgently abolish or, at the very least, reform the CDP along APONTs recommended model.
ii. Work for the Dole
The current Work for the Dole scheme for jobactive participants has operated since July 2014. It was initially costed at around $1 billion over three years. The 2017-2018 Budget extended with program with some changes. From 1 January 2018, jobactive providers will administer Work for the Dole activities, rather than contracted Work for the Dole coordinators.
20
The NSSRN has held long-standing concerns over the effectiveness of the program. An evaluation report of Work for the Dole 2014-2015 found that the scheme improved the probability that an unemployed person would find a job by just 2 percentage points and off a low base.
21
Previous independent reports on earlier versions of the scheme had found that Work for the Dole participants spent longer amounts of time on welfare payments, than those not required to participate.
22
That research, funded by the Commonwealth Department of Family and Community Services, was consistent with international evidence on the ineffectiveness of work-based programs for the unemployed. Reports suggest that, like the Community Development Program, jobs available in Work for the Dole predominantly involve menial tasks requiring low-supervision.
23
They therefore do not offer significant skill development for those seeking ongoing work.
The NSSRN also holds a number of concerns regarding safety on Work for the Dole work sites. In April 2016, Josh Park-Fing, an 18 year old, died while participating in Work for the Dole.
24
His death highlighted significant issues on safety and lack of proper workplace training. The tragedy also highlighted the inadequacy of the Work for the Dole insurance scheme, which offers compensation amounts that are much lower than workers compensation schemes.
25
The NSSRN urges the government to do away with Work for the Dole schemes. They do not increase the long term availability of jobs. Providing better training opportunities to people who have the support of adequate unemployment payments is more likely to improve employment outcomes and the wellbeing of people on income support.
iii. Youth Jobs PaTH
The NSSRN calls for the overhaul of the Youth Jobs PaTH scheme for unemployed young people. This $750 million scheme involves employability skills training for young people followed by a 4-12 week internship of between 30-50 work hours per week. The scheme provides a $1000 financial incentive to businesses to trial a young person in these internships. During this time, the young person
receives $200 on top of their fortnightly social security payments. Businesses receive an additional $10,000 payment over 6 months if they hire a young person after the trial has ceased.
26
The NSSRN does not support this internship scheme. The Department of Employment released figures in October 2017 that showed that nationally 2,545 internship placements had commenced to date with 1,450 businesses.
27
Of concern, is that most internship agreements were for the maximum 50 hours per week participation.
28
There have been reports of businesses exploiting the model, and forcing young people to work in excess of the maximum 50 hours. The Department of Employment has suspended at least one business due to these breaches.
29
Discounting those internships still underway, the Department of Employment figures show that only 39% of interns received jobs at the end of their internship.
30
The remainder completed the internship without any job offer, had their internship end early, or for unknown reasons had their internship end. It offers little prospect of employment at the completion of the internship.
This scheme leaves young people vulnerable to exploitation and entices young people to work for long hours for insufficient payments. Young jobseekers participating in these internships may earn the equivalent of $4-$6 per hour for their work. Coupled with their social security payment, these young people are paid less than minimum wage. They receive no superannuation benefit, and do not receive penalty rates or casual loading.
The Youth Jobs PaTH scheme benefits participating businesses much more than young people. We call for the government to abandon the scheme, and invest the programmes funds into an adequate level of income support combined with targeted and flexible employment training for young people that is more likely to lead to sustainable employment.
iv. Income management and Cashless Debit Card schemes
In our 2015-2016 Pre-Budget Submission, the NSSRN called for the abolishment or reform of mandatory income management schemes across the country. Our position has not changed. There is no hard evidence that these schemes have a positive impact on participating individuals. On the contrary, there is evidence that income management has had a negative impact on the health and wellbeing of these communities, particularly children. Shockingly, recent research has shown that that restricting welfare payments reduced birthweight by over 100 grams and increased the probability of low birthweight by around 30 percent.
31
The report also found that school attendance fell by an average of 4 per cent across the income managed communities.
32
An urgent response to this crisis is required.
There are a growing number of income management measures in this country. As of August 2017, 25,009 people were on income management. The schemes disproportionately target Indigenous communities: an overwhelming 79% of people on income management are Indigenous.
33
There are several legislated income management schemes.
34
A person subjected to income management has 50 to 70 per cent of their social security payments quarantined into a Centrelink administered account to spend on priority needs. The remaining amount is paid into the persons bank account. Many have their income-managed benefits allocated to a BasicsCard, which is similar to a bank issued debit card without the ability to withdraw cash.
In recent years, legislation has introduced a Cashless Debit Card in certain trial communities.
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This operates in a similar way to other income management schemes. The majority of a persons social security payment is quarantined onto a Cashless Debit Card.
36 The amount on the card cannot be accessed as cash or used to buy alcohol, drugs or gambling. The Cashless Debit Card also disproportionately affects Indigenous communities. The NSSRN expressed strong opposition to the introduction and the recent proposed expansion of the Cashless Debit Card.
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In our view, these racially discriminatory measures disempower communities and further entrench issues of poverty and displacement. Some Indigenous participants on the Cashless Debit Card consider it akin to "ration days".
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The scheme exacerbates financial stress for people already struggling to meet basic needs, by limiting control over their finances.
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We draw attention to recent observations and recommendations made by the United Nations Committee on Economic, Social and Cultural Rights (CESCR) in respect of income management in Australia. The CESCR expressed concern about Australias mandatory income management schemes and the disproportionate affect these schemes have on our Indigenous population.
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The Committee ultimately recommended that the Australian government consider maintaining only an opt-in income management scheme with appropriate oversight of decision making and monitoring, and review existing and envisaged conditionalities for eligibility to social assistance and unemployment benefits as well as penalties for non-compliance, and ensure that all beneficiaries receive adequate benefits, without discrimination.
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The cost of income management schemes are significant. In 2015, the Northern Territory regime cost an estimated $7,500 per person.
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In 2017, the Cashless Debit Card trial reportedly cost the equivalent of $10,000 per individual.
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Despite this high cost, evaluations of income management schemes have not demonstrated that they effectively achieve their intended objectives.
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We call for the abolishment of mandatory income management schemes across the country. The schemes divert funds away from legitimate purposes such as addressing inadequate levels of income support, or programs and services that could be used to better help overcome chronic health conditions, accessibility to housing, and underfunded education provision.
4. 2017-2018 Budget Measures The NSSRN remains opposed to a number of social security measures proposed in last years Budget that are still before Parliament. These measures are contained in a number of bills currently before the Senate.
The NSSRN made a submission on each of these bills to the Senate Standing Committee into Community Affairs. In summary, we are opposed to the following measures:
- Social Services Legislation Amendment (Welfare Reform) Bill 2017: o New Targeted Compliance Framework; o Drug testing trial and related measures; o Removal of drugs/alcohol dependence as a reasonable excuse for non-compliance purposes; o Delayed start to payments, including removal of intent to claim provisions; o Cuts to bereavement payments; and o New activity requirements for unemployed people aged 55 to 59.
- Social Services Legislation Amendment (Payment Integrity) Bill 2017: o Changes to residency requirements for Aged and Disabilities pensions; o Restricting access to overseas payments for pensions; o Increasing the liquid assets waiting period; and o Tightening FTB Part A income test for higher earners.
- Social Services Legislation Amendment (Better Targeting Student Payments) Bill 2017: o Restrictions to Relocation scholarships; and o Cuts to Education Entry Payment and Pensioner Education Supplement.
Our submissions to the Senate Committee explain and outline these concerns in detail. Our submissions are available through searching the specific bill on the Committees website.
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5. Conclusion
There are ongoing efforts to reduce spending on social security. However, many of these costreducing measures are eroding the safety net in our society for those experiencing hardship, unexpected changes in their circumstances, or the onset of disability or illness.
Our international human rights obligations compel us to provide a minimum standard of living for everyone in our community.
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The living budget standards provide the evidence base for the minimum level of social security payment rate needed to reach this standard.
The consequential benefits of providing this minimum standard are immense: income security improves well-being, physical health, and provides greater opportunity to live an enriched social and economic life. These benefits lead to cost reduction in health and social services spending and a better society for all.
We urge the Government to recognise the benefits of investing in social security measures that work, rather than wasting money on those that dont, or even worse make it more difficult for people who are already struggling to find work. We urge the government to implement our recommendations in the area of social security.
6. Contact Details
Joni Gear Legal Project Officer National Social Security Rights Network T: 0448 007 428 E: rpo@nssrn.org.au
Leanne Ho Executive Officer National Social Security Rights Network T: 0448 007 201 E: eo@nssrn.org.au
www.nssrn.org.au/publications/