Employment Environment ‘Hostile‘ for Welfare Recipients - Report

The chances of finding employment are “seriously limited” for those currently living on welfare, according to major Church providers of social services in Australia.

A report from The National Centre for Social and Economic Modelling (NATSEM), commissioned by Anglicare Australia, Catholic Social Services Australia, The Salvation Army and UnitingCare Australia, shows that people receiving Newstart or Youth Allowance face levels of financial hardships that make finding employment opportunities difficult.

National Director of UnitingCare Australia, Lin Hatfield Dodds, said this group of people is looking for work in an environment that is inaccessible and even hostile.

“Work is increasingly part-time and casual and employers are looking for skills and experience these people don’t have. Child care and transport are expensive or unavailable,” she said.

Executive Director of Catholic Social Services Australia Paul O’Callaghan said there is an urgent need for an increase in the basic allowance and for realistic indexation.

“Far from providing an incentive to find work, the current inadequate level of the payment prevents many people from seeking work and is adding to long-term and intergenerational disadvantage,” he said.

Major Brad Halse from The Salvation Army said in an environment of close to full employment, most of the people in Australia who don’t have jobs are living with long-term and complex barriers to employment.

“There is a need for intensive support at a very basic level for long periods of time,” Halse said.

“The best outcome for unemployed people is to get meaningful, long-term work. We are optimistic that with the right support, this is an achievable goal. But it will take commitment from governments, business and communities and from individuals,” Anglicare Australia Executive Director Kasy Chambers said.

Going Without: Financial Hardship in Australia examines the risk of poverty, the persistence of poverty, and deprivation and financial stress endured by people on unemployment payments.

Key Findings

• Households where the unemployment benefit is the main source of income are more than five times as likely to be in poverty
• A very high proportion (46.8 per cent) of unemployed households remain in poverty for at least two years compared to the national average of 8 per cent
• After housing costs unemployed people have disposable incomes of $242 a week, about 25 per cent of the national average
• Unemployed households have $22 a day after shelter, electricity, food and health are accounted for (this is half of other government beneficiary households and 12 per cent of that for wage and salaried households
• Rates of financial stress and deprivation are much higher amongst unemployed households
• Almost 40 per cent of these households experience at least three forms of financially driven deprivation (out of six) compared to the all households average of 8.7 per cent
• Over 15 per cent of unemployed households went without meals compared to 3.2 per cent of all households
• Almost 14 per cent of unemployed households could not afford to heat their homes compared to 1.9 per cent for all households
• Unemployment benefit in Australia is particularly low, especially for singles
• Unemployment benefits are indexed to ABS Consumer Price Index which is consistently lower than average household incomes growth
• This discrepancy ensures that allowee households continue to slide further behind the rest of the community in terms of economic resources and opportunities

Recommendations

The major Church providers make the following recommendations in response to the report findings:

• Increase in unemployment benefits for singles by $50 a week
• Address anomalies in the tax transfer system, as advocated in the Henry Tax Review
• Establish an independent commission to set adequacy benchmarks
• Lock in support for jobseekers in deeply disadvantaged areas or who face many barriers to getting and keeping a job
• Improve services for long-term unemployed people
• Expand wage and subsidy schemes
• Make VET work for the most disadvantaged job seekers
• Monitor the impact of changes in the tax-free threshold and the taper rate for income support to remove disincentives