Andrews to Look at Review Welfare Payments

The Coalition Government is considering a review of all welfare payments, including income-support payments for single parents, according to reports.

The Australian has reported that the Government believes the system is ad hoc and needs be simplified and reformed to encourage welfare recipients into work.

It has been reported that Social Services Minister Kevin Andrews is critical of changes made by the former Labor Government to the Newstart allowance for single parents and prefers a more generous scheme.

Pro Bono Australia News reported in March that the welfare sector had made a united call at the Australian Council of Social Service National Conference in Adelaide to increase the single Newstart Allowance payment by $50.

Welfare peak body ACCOS President Simon Schrapel said ACOSS looked forward to the Government working closely with the community sector and others to get this important reform right.

“The present system of working age payments is in need of structural reform. ACOSS believes that this is best achieved by having all payments within a single department, something we had advocated to the Coalition and are pleased to see implemented,” Schrapel said.

“The main problem with the current system is the growing gap between pension payments and allowances, which creates a disincentive to work. This gap means that people are financially penalised when they start searching for paid work. For example, a person who moves from the Disability Support Pension to the Newstart Allowance loses $163 a week.

“At the root of this problem is the very low level of the Newstart Allowance, at just $35 a day, which is widely acknowledged to be grossly inadequate. ACOSS, with broad support from the community, business and trade union sectors, has been calling for a $50 per week increase to allowances.

“The social security system should focus on preventing poverty and helping people to become self-sufficient. At present, too much resources and energy is wasted classifying people into payment categories and helping them manoeuvre through an unnecessarily complex system.

“Reform should ensure that assistance is based on financial need rather than whether people are likely to find a job. People who have work capacity should receive the supports they need to train and find a job.

“ACOSS looks forward to the Government working closely with the community sector and others to get this important reform right. Many lives will be directly affected by reform, and it is vital that these voices are heard in any reform process.”

According to reports, Andrews’ overhaul could include changing the income test for parents on the unemployment payment.

New rules that came into effect in January moved single parents off parenting payments and onto the Newstart allowance – which dropped payments by $60 to $100 a week.

The decision was reported to save taxpayers $728 million over four years.

The Australian Greens have also responded to the reports saying the top priority for welfare reform is an immediate increase of $50 a week to Newstart and the reversal of cuts to all single parents.

"People are living in poverty and need an immediate increase in income support. While we welcome a review with the aim to simplify the system, there is already enough evidence about the need for an increase," Australian Greens spokesperson on families and community services,  Senator Rachel Siewert  said.

"Better assistance must be available for all single parents on Newstart, not just those affected by January's cuts to parenting payments. Those single parents dumped onto Newstart by the Howard Government also need assistance.

"It's not good enough for the Government to help some people, but not others. The payments for all single parents on Newstart need to be included in this review.

"Everyone on Newstart is doing it tough, which is why the Government need to act on the substantial body of evidence supporting a $50 per week increase to Newstart.

"Changes to our system of income support need to empower people and make it easier for them to get the skills and training they need to re-enter the workforce, raise a family and find secure work. The Government can't continue punishing people and dressing it up as policy.

"Any review needs to focus closely on the barriers that prevent people from entering the workforce and needs to address the specific needs of the different cohorts of people on Newstart. Changes to the income support system need to go hand-in-hand with reforms to employment services.

"There's no doubt that our income support system is too complicated and does not adequate deliver the income support and assistance that people need.

“This review needs to be thorough and ensure that no one falls through the cracks.”