No Increase to Newstart - Senate Inquiry

A Senate Committee report has rejected a rise in the controversial Newstart Allowance despite Labor and Greens MPs on the committee agreeing the welfare payment is too low.

While the Senate report acknowledged that Newstart is inadequate, it has steered away from calling for a payment increase, delivering six recommendations to get young people off the dole more quickly.

The report has left welfare Not for Profit and umbrella organisations disappointed.

Welfare advocates and Not for Profit peak bodies have been calling for an increase to Newstart saying $35 per day is inadequate and demanding an increase of $50 to the welfare payment.

Labor Senators on the Senate Committee said while the recommendations in the committee's report go some way to address their immediate concerns, it is plain that Newstart Allowance is too low, particularly for single recipients.

“For this reason Newstart Allowance Single should be increased, taking into account other potential increases consequential to recommendations made in the committee's report,” the dissenting Labor Senators said.

Greens Senators on the Committee said: “The Australian Greens are particularly disappointed with the majority report, because the committee has perceived the resolution to (Newstart’s) inadequacy to be a choice between:
[One] of two possible solutions… either Newstart Allowance should be increased to raise the standard of living available to recipients, or more careful thought needs to be applied to how best to ensure that people spend as little time as possible on welfare between jobs.”

“The committee was not ‘forced’ to take this approach. It has demonstrated a lack of will to find appropriate and sufficient solutions to resolve the clearly demonstrated inadequacy of the payment.”

Welfare peak body ACOSS has been joined by many other peak bodies and organisations campaigning for a $50 increase to the income support allowances.

“We understand the current budgetary constraints, however, a $50 increase is affordable and the Government must find that money in this coming Budget,” ACOSS CEO Dr Cassandra Goldie said.

“We will be looking for the Government to do everything possible to correct this 20 year injustice, and finally lift this payment to a decent liveable level.”

At the same time as the Report was released the Federal Government offered a sweetener in the form of an Income Support Bonus.

The Minister for Employment and Workplace Relations Bill Shorten introduced the Social Security and Other Legislation Amendment (Income Support Bonus) Bill 2012 to Parliament to provide more than $1.1 billion in extra payments over the next four years.

The Income Support Bonus, part of the 2012-13 Budget, will help people who receive income support allowance payments to manage unexpected cost of living expenses.

“Unexpected household costs can crop up at any time – things like unforeseen medical expenses and car repairs,” Shorten said.

From March 2013, around one million people will receive the Income Support Bonus of $210 extra per year for eligible singles and $350 to most couples where both partners are eligible.

Allowances attracting the bonus include Newstart, Parenting Payment, Sickness Allowance, Special Benefit, Youth Allowance, ABSTUDY Living Allowance, Austudy, Transitional Farm Family Relief Payment and Exceptional Circumstances Payment, the Military Rehabilitation and Compensation Act Education and Training Scheme, and the Veterans’ Children Education Scheme.

The payment is not taxable or means-tested and will be indexed to the Consumer Price Index to keep pace with inflation.

Recipients will not have to apply to receive the Income Support Bonus as the payment will be made automatically by the Department of Human Services to those eligible in instalments in March and September of each year.