Growth in Age Pension receipt: the elephant in the room of the welfare reform debate

Image source: Wikimedia Commons

The Minister for Social Services, Kevin Andrews, has recently expressed concern at the continued growth in the number of people in receipt of income support payments, and suggested that the welfare system is unsustainable. He has therefore commissioned Patrick McClure to undertake a review of the welfare system. Mr McClure’s previous review led to the Welfare to Work changes in 2006. However a closer investigation of the figures, released by the Department of Social Security, suggests that welfare receipt among those of working age is already declining, and hence the scope to make further large reductions may be limited. However Age Pension take up rates continue to increase.

Payments to support victims of overseas terrorism

Image: 2002 Bali Bombing Memorial

Prime Minister Tony Abbott recently announced that victims of past overseas terrorist attacks would be entitled to an Australian Victim of Terrorism Overseas Payment (AVTOP), worth up to $75,000. The AVTOP was created in 2012 under the Gillard Government. Many of those affected by previous attacks have received some form of assistance from the Australian Government including coverage of medical costs and counselling/rehabilitation—the AVTOP provides a new formal mechanism for delivering monetary assistance. While there is strong community support for the scheme, a number of issues have been raised in regards to its design.

Future growth in DSP receipt—not all bad news

Image source: Department of Social Services

No doubt one of the priorities of the proposed review of income support payments will be the Disability Support Pension (DSP). DSP numbers have risen substantially in recent decades, despite numerous reforms designed to tighten eligibility and hence restrict growth. However a recent paper suggests that changes made to other income support payments have offset these reforms, and that the story is more positive than previous reports suggest.

‘Grandfather’ arrangements for PPS – entitlement or inequity?

Image source: Leichhardt Municipal Council

Since it was announced in the 2012-13 Budget that ‘grandfathering’ arrangements for single parents receiving Parenting Payment Single (PPS) would cease on 1 January 2013, there has been considerable concern expressed at the plight of these recipients who would see their weekly income support payments reduced by over $130 per fortnight for those on the maximum rate, and in some cases not be entitled to any income support and associated benefits if they had high enough earnings. However there appears to have been little recognition that these changes also mean that those who have been in receipt of PPS continuously since June 2006 are now being treated equally to the majority of single parents on income support.

Who is on Newstart?

Image source: British Library

Given the current Senate Committee inquiry into the adequacy of the allowance payment system for jobseekers and others it is perhaps worth considering what sort of people are reliant on these payments? Recent data released by the Department of Families, Housing, Community Services and Indigenous Affairs enables us to explore the characteristics of those receiving these allowances as at June 2011.

Despite the GFC, income support reliance remains low

Image source: Western Australian Department of Health

The Senate Education, Employment and Workplace Relations Committee is currently holding two separate but related enquiries, one into the adequacy of the allowance payment system for jobseekers and others, and the other into legislation to remove the ‘grandfathering’ transitional arrangements for parenting payment recipients (among other changes).

In this context, it is timely to look at the impact of previous changes to the welfare system and consider what proportion of the working age population is affected by issues being considered by the Committee.

New Place Based Income Management to commence 1 July

Image: Bankstown Railway Station (Wikimedia Commons)

A new form of income management being introduced next week will extend welfare quarantining to selected disadvantaged areas across Australia, targeting people involved in child protection matters and deemed vulnerable to financial hardship.

From 1 July, the Government will introduce a new form of income management to communities in Queensland, New South Wales, Victoria and South Australia.
 
So, how will the new Place Based Income Management operate and how does it differ from existing forms? Why base it in particular areas? What do we know about whether or not it is likely to be successful?

Income management: some answers to key questions

Image: BasicsCard kiosk, (Centrelink)

From 1 July 2012, income management will be extended to five new disadvantaged communities across Australia: Bankstown (New South Wales), Logan (Queensland), Rockhampton (Queensland), Playford (South Australia) and Greater Shepparton (Victoria).

While the policy of income management of welfare payments has been highly controversial, the specific details of its various forms are not generally well understood.

The Parliamentary Library has released a Background Note seeking to address this lack of understanding. It provides a brief overview of the history of income management and responses to a number of key questions about the policy.

Government extends special Youth Allowance access to Inner Regional students

Image: University of the Sunshine Coast

The Government has announced that it will introduce legislation allowing students from inner regional areas to access independent Youth Allowance under the same rules that apply to students from Outer Regional, Remote and Very Remote areas.

This follows the Government’s release of a scheduled review of student income support reforms conducted by Professor Kwong Lee Dow (the Dow Review).

The Government brought forward the review by 12 months in response to concerns about access to income support by students in rural and regional areas. The Government has not accepted Professor Dow’s most contentious recommendation which is to remove the current special arrangements for young people from Outer Regional, Remote and Very Remote Australia and establish a single new self-supporting criterion for independence for young people.

Carbon Pricing Mechanism—Assistance to welfare recipients

(Image: Clean Energy Future website)

The Government has announced a package of measures aimed at providing assistance to households to compensate for the cost of living impact of the carbon price. Assistance will be delivered through permanent increases to welfare payments and tax cuts. The Parliamentary Library has published a short brief outlining the assistance provided to welfare recipients.

The brief notes that, according to the Government’s modelling, welfare recipients will be overcompensated for the expected cost of living impact of the carbon price. Indeed, it appears that welfare recipients will also effectively be compensated more than once when normal processes of payment indexation are taken into account. The brief also notes that pensioners receive more assistance than other welfare recipients (such as jobseekers) and that this essentially reflects the fact the current differences in rates of payment between different categories of welfare recipient.

When Garnaut met Henry: the carbon price and welfare reform

Professor Ross Garnaut’s recent update paper no. 6 to the Garnaut Climate Change Review, released on 17 March 2011, found that ‘protecting the most vulnerable is critical to the success of the carbon price’. Professor Garnaut found that while reforms to income taxation would, for most taxpayers, assist in mitigating the effects of a rise in the price of consumer goods resulting from the introduction of a carbon price, those on little or no income could face hardship unless reforms are also made to the social security system.

History of Australian pensions

 The long running Parliamentary Library publication Social Security Payments for the Aged, People with Disabilities and Carers 1901 to 2010 has been updated to include policy changes since 2006.

The major parties and ‘corrosive’ welfare

Where do the major parties stand on welfare policy? In what direction can we expect welfare policy to be taken throughout the course of the next parliament? One thing clear from the election policy announcements of the major parties is that there is likely to be a further strong emphasis on addressing what each describes as the ‘corrosive’ effects of welfare.

Australian Government assistance to refugees

Despite claims made in a series of emails that have been widely circulated throughout Australia, refugees are not entitled to higher benefits than other social security recipients. In recent years, a series of emails have been widely circulated throughout Australia claiming to describe the social security entitlements of refugees, compared with those of other Australian residents.