Communist Party of Australia

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Issue #1613      October 2, 2013

Welfare payment increases show fault lines developing

“The new rates of income support payments this quarter highlight deepening fault lines in Australia’s social security arrangements,” says the National Welfare Rights Network. Maree O’Halloran from the Network reiterated the call for the government to give priority to poverty alleviation and assistance for people out of work for lengthy periods.

“The financial losses for single parents dumped onto Newstart Allowance will reach $80 per week. The most that 700,000 people looking for work on the Newstart Allowance will receive is an extra $2 a week. This still leaves unemployed Australians languishing on poverty-rate payments of just $35 a day.”

Three and a half million age, disability and carer pensioners got a much needed and welcome boost from September 20 of up to $9 a week to $375.85. With rises to the Clean Energy Supplement (10 cents pw) and the Pension Supplement (15 cents pw), pensioners will receive a total boost of $9.35 to $413.55 a week.

By contrast, payments for single unemployed people on maximum rate of the Newstart Allowance will increase by just $2 per week, to $250.50. In addition, the Clean Energy Supplement will increase by five cents a week, to $4.25. This leaves a Newstart recipient just $254.75 a week to live on.

Single parents on Newstart will receive a basic payment of $271.05 per week, an increase of $2.15. Their Clean Energy Supplement will increase by five cents a week, to $4.60 per week, bringing their total weekly income to $275.65.

112,000 single parents on Newstart will get only a quarter of the increase that they would have received if previous governments had not shunted them onto the lower-paying Newstart Allowance.

Around 230,000 Parenting Payment Single recipients will get a boost of $8.10 per week in the base rate of pension, to $339.20 per week. Increases to the Supplement (10 cents) and the Clean Energy Supplement (5 cents), brings their increases to $8.25, to a maximum weekly income of $355.80.

“Single parents on the maximum rates of Newstart payments are now $80.15 per week worse off in comparison to those receiving Parenting Payment Single.

In 2006, the weekly difference for parents on Newstart and single parents on the pension was only $26. This difference has grown by $54 to $80 over the intervening six years, largely due to the less generous indexations arrangements that apply to Allowance payments.

Young unemployed people and students on Youth Allowance do not receive any increase from September 20, as their payments are only indexed in January of each year.

This means around 350,000 young unemployed people and students on the Youth Allowance will miss out altogether. An 18 year old living away from home must try and survive on desperately low social security payments of just $203.75 per week. They are simply unable to keep a roof over their head, feed themselves and pay bills. It is impossible to look for work on a sum that hasn’t been increased in real terms for nearly 20 years.

The good news is that 1.1 million Australians on the lowest social security payments will receive half of their annual Supplementary Allowance, worth $105 for singles and $175 for couples.

Unfortunately, the[Abbott] government has indicated that they will axe the Supplementary Allowance, which has been the first real increase in payments for unemployed people in almost two decades.

The release of the new twice-yearly indexation of social security payment shows an alarming and widening gap in payment rates between people on pensions and those on allowance payments.

The difference in weekly payments for single people on pensions and Newstart Allowance is $125.35. When the various supplements are taken into account, the gap widens to $158.50 a week.

Unfair indexation is making the Australian social security system increasingly unfair and unsustainable. Newstart Allowance is predicted to shrink to just a third of the pension by 2050 and just 11 percent of the minimum wage if the current rules are not changed.

“We will continue to advocate for improved employment assistance to get people into work and an adequate income while people are looking for jobs,” said Maree O’Haolloran.

Next article – West Papuans flown to Port Moresby

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