Welfare Rights Review

Budgeting for tough times: Welfare Rights looks at the 2015-16 Federal Budget

The last few Federal Budgets have been pretty hard on people reliant on social security and family payments. Welfare Rights analyses whats good and bad in the Federal Budget.

However a raft of cuts to family payment, including restricting FTB B to families with children under six  are still before the Parliament, and the Government is negotiating with crossbench Senators to get support for the cuts, by raising the relevant age to either 10 or 12.

At the same time, the Government is trying to get a new childcare package through the Parliament.  The changes that the Government is proposing will be beneficial to many families, but it is funded by harmful cuts to family payments. The Parliamentary Budget Office estimates that the savings from family payments would save $9.4 billion in 2018-19. Around $6 billion of these savings will come from the pockets of the poorest families. By contrast, the childcare package is very generous to higher income families, and if savings are needed, this is where they can be found.

While the six month waiting period for job seekers under 30 was abandoned, there is still pain in the works for young people under 25, who from 1 July 2016 may face a new 4-week waiting period. This comes at a substantial cost to job seekers, at $173.3 million over 4 years. The NWRN wrote a detailed submission to the Senate Inquiry considering this measure which can be found here.

The re-introduction of plans to extend Youth Allowance and Sickness Allowance (other) from age 22 to age 24, from 1 July 2016, is another blow for young people.  If these policies get the nod from the Senate, it will mean a cut of at least $48 a week for around 70,000 young people each year, or $2,500 per year for individuals, which equates to a $517 million cut in support for young people over 4 years.

These policies need to be considered against the backdrop of a rate of unemployment among young people which currently stands at 13.3%. This is more than twice the official rate of unemployment across Australia, which is 6%.

Other negative policies include the indexation pause, which means a $134.8 million cut in assistance for job seekers and students. The legislation excludes pensions, and would maintain for three years payments at their current level, income free areas and the thresholds for students, including income bank limits.

Another proposal recycled from last year’s budget extends the one-week Ordinary Waiting Period to all payments – excluding Widows Allowance. This would take a further $274.8 million over 4 years from people waiting to receive working age payments.

But some things just don’t change: there is still no increase to payments for people looking for work. The circumstances of single people on Youth Allowance payments of $213 a week ($30 a day) or those struggling to get by on the Newstart Allowance of $260 per week ($37 a day) are unlikely to be improved if the policies highlighted above are implemented.

For more on the National Welfare Rights Network’s response to the 2015-16 Federal Budget check out:

Budget hits and misses leaves vulnerable families and jobless at risk, 13 May 2015

Pension makeover looking good, says National Welfare Rights Network, 7 May 2015

Centrelink computer upgrade welcomed, but questions remain over fraud, 13 May 2015