Upcoming Changes to Income Support – An Increase That Won’t Go Far

Woman calculates changes to income support

Written by Senior Policy Officer for the Physical Disability Council of NSW (PDCN), Hayley Stone

The Federal Government recently released its plans to increase the working age payments, including Jobseeker and the Youth Disability Support Pension, by $50 a fortnight – or $3.70 a day.

This is less than a cup of takeaway coffee a day, not that most who receive these payments could afford this anyway. It is not going to go far.

The increase is significantly less than the $25 a day proposed by the Raise the Rate Campaign, which would raise these payments above the poverty line. The campaign was championed by over 165 community sector organisations.

You may be surprised to learn that for approximately 44% of adults of working age who live with disability, income support is their main source of income.

While a percentage of these people are on the Disability Support Pension (DSP), a significant number only receive Jobseeker and Youth Allowance. Unemployment rates for people with disability are more than double the rate of those without disability.

So, any decisions the Government makes on these support payments will significantly impact the lives of people with disability.

Failure to respond

So why has the Government failed to respond to the growing call to ‘raise the rate?’    

The COVID-19 pandemic took a metaphorical sledgehammer to Australia’s economy. At the peak of Australia’s lockdown response to the pandemic, the unemployment rate hit a record 7.5%. This is worst rate of unemployment Australia has seen since the late 1990’s.

Part of the Federal Government’s response to the impending economic recession was to increase the basic rate of Jobseeker by $550 via the Coronavirus Supplement. This decision was pragmatic. People who had lost their jobs would receive an extra boost of support to service their ongoing financial commitments. In doing so, they would continue to support the economy.

The Federal Government was careful to frame this increase as temporary – a supplement, rather than an increase of the basic rate. However, the practical side effect was that income support was finally comparable to minimum wage.

What did this mean in a practical sense for people who previously had to manage on $40 a day? The answer is “a lot”.

Man calculates changes to income support

Affording basic needs

This extra income meant many people on working age payments could finally cover their basic living costs, including housing, transport, food and medications.

People were able to use the extra income to save for large ticket items… Car repairs, dental work, fixing their homes, car registration, study supplies and basics like new clothes and shoes.

They could eat regular meals and afford things like fresh fruit and vegetables – all luxuries when you are carefully rationing your money to make it through the fortnight.

The Coalition Government has stated that the pre-COVID Newstart rate of $40 a day is actually higher if you add the additional supplements and subsidies people often receive. Such as the mobility allowance and rent assistance. But these are specific, necessary supports to address additional costs.

The Government has also made it very clear that people on Jobseeker and Youth Allowance are expected to supplement their income support with paid work. These are not living wages, is the retort. Its stated aim is to have people find jobs and get off the payments as soon as they can.

In other words, it’s got to be uncomfortable to get you off the system.

But how low is too low?

This is a difficult question when there is no official poverty measure in Australia.

Jobseeker (or its predecessor, Newstart) has not seen an increase in real terms for over 25 years, while the cost of living has increased substantially – particularly for housing. Anglicare’s Rental Affordability Snapshot shows that only 13 properties (0%) are affordable nationally for a single person on Jobseeker to rent.  

What we do know is that the extra $550 injection into the Jobseeker payment has not proved to be a disincentive to finding work. Figures from January show the unemployment rate has reduced to 6.4%, despite massive constraints across the labour market.

Raise the Rate campaign

The Physical Disability Council of NSW, together with the coalition of organisations as part of the Raise the Rate campaign, will continue to push for an increase to Jobseeker and Youth Allowance.

Our goal is to ensure that people with disability who are studying or looking for work are able to meet their basic living costs and live with dignity.

We are also committed to fighting to ensure any increases do not come at the cost of supplementary payments. Payments such as the mobility allowance.

Check out our website for more information about PDCN’s activities, or to become a PDCN member – https://www.pdcnsw.org.au/get-involved/become-a-member/

You can find out more about the Raise the Rate Campaign and sign up as a supporter at https://raisetherate.org.au/.

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