Almost two-thirds of low-income households in Australia experienced financial stress in 2015/16, with half of households reliant on income support payments reporting four or more financial stress indicators.

Dr Cassandra Goldie, CEO of ACOSS said the latest Household Expenditure Survey figures released yesterday by the ABS are a wake-up call to government to increase inadequate income support payments.

“People are struggling to pay electricity bills on time, can only afford second-hand clothing and are unable to raise $2,000 in an emergency,” says Dr Goldie.

“What is worse is the lowest 20% income group are spending higher proportions of their meagre incomes on housing, food and energy than what they were six years ago.

In 2009/10, the bottom 20% spent 20.8% of their income on housing, 4% on energy and 18.3% on food. In 2015/16, housing accounted for 23.4% of income, energy 4.4% and food 18.7%.

“This is a crucial finding showing that levels of basic income support have not kept pace with rising costs, particularly housing and energy prices.

“We already know over three million Australian people are living in poverty, including 731,000 children. The biggest risk factor to living in poverty in Australia is being without paid work and being reliant on income support payments.

“The unemployment payment of $38 per day is totally inadequate to cover the cost of essentials and ensure that people can participate in their communities. It is so low that it is recognised by the community, including business, as a barrier to employment.

“Rather than cut income support payments supporting people in the bottom 20% as the government is currently trying to do, our political leaders must ensure our social safety net provides people with enough income to purchase essential items and live in their local communities with dignity.”