The Guardian November 15, 2000

$170 million rip-off: ferocious attack on poor

by Andrew Jackson

John Howard and Jocelyn Newman have "saved" over $170,000,000 by fining 
unemployed workers and students for minor breaches to social security 

This ferocious attack on the poor is detailed in a report prepared by ACOSS 
(Australian Council of Social Services) and the National Welfare Rights 

ACOSS President Michael Raper said, "These high fines are out of all 
proportion to the seriousness of the `offence'  a penalty of between $280 
and $340 is imposed for failing to reply to a letter, while failing to 
attend an interview costs a person between $650 and $1300."

"The most common penalty imposed on unemployed Australians for a rule 
infringements was $763  this is higher than the average fine imposed by 
NSW courts for a `break and enter' offence ($706)."

The report, titled Doling Out Punishment: the rise and rise of social 
security penalties, details how over 302,000 "breaches" were imposed in 
the last financial year, a staggering 250 per cent increase since 1997.

In the last two years almost 25,000 fines were imposed on children under 
18, with a further 11,000 breaches were imposed on those over 50.

Many penalties are being imposed improperly or indiscriminately, as 
evidenced by the fact that an extraordinary additional 172,000 
penalties were applied by Centrelink but later revoked.

The report slams the fines as "clearly excessive and unjustifiably harsh" 
and lays the blame firmly at the feet of the Howard administration's one-
sided "mutual obligation" policy.

It should be noted that breaches are not about social security fraud  
they relate to alleged infringements of often complex rules and 
increasingly tight Activity Test requirements.

The report details how it is the most disadvantaged groups that are copping 
the brunt of this policy.

"Homeless people are particularly affected by these penalties because 
Centrelink or Job Network letters go to an old address or are received too 
late", said Mr Raper.

"Other vulnerable Australians likely to be breached are young people ... 
people with psychiatric conditions, people with alcohol or drug problems; 
people with low literacy skills; and indigenous Australians", Mr Raper 
pointed out.

ACOSS reports that many welfare agencies and charities have specifically 
reported that the increasing number of social security breaches has added 
to the demand of low income people for emergency financial relief and 
material aid.

The "Newstart" unemployment benefit paid to adults is currently $163 a 
week, already way below the poverty line.

Any first or second "breach" is then deducted from this amount over six 

The 13,647 people who were penalised for a third breach had their benefits 
withheld completely, leaving them without a means to survive for eight 

Also contained in the report are a number of alarming case studies telling 
how people have been breached when they have not received adequate 
notification time for interviews, had disabling medical conditions which 
prevented them from meeting their Activity test requirements, or where the 
Centrelink office was clearly at fault in the circumstances.

In one example, a woman correctly informed Centrelink that she had casual 
work and was regularly declaring her income. However, as a result of an 
error made by her employer, she did not declare the correct amount of 

Centrelink determined that over a four-month period it had overpaid Fiona 
by $625. As well as having to repay that amount, an $800 fine was imposed -
- a penalty that an independent review tribunal eventually overturned.

In another case an 18-year-old man with schizophrenia and hepatitis C who 
was living on the streets was breached for turning up half an hour late for 
an interview.

The Federal Government's "mutual obligation" policy is a farce.

We must remember that this $170 million snatched from the poor comes at the 
same time the Federal Government has cut $1 billion from programs to help 
disadvantaged jobseekers.

The Government also plans to spend record amounts on private schools and 
the military in the next budget, and give away billions of dollars in tax 
credits to some of the world's largest corporations.

ACOSS head Mr Raper calls on the Government "to immediately reduce these 
unjustifiably heavy penalties which are causing so much unnecessary 
hardship, and on Centrelink to stop imposing penalties so 

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