9 May 2015
On the eve of the Federal Budget, ACOSS and the state and territory Councils of Social Service have urged the Commonwealth Government to urgently address the gaping holes in Australia’s social safety net, releasing new research showing that people on the low unemployment payment and Youth Allowance continue to fall behind.
The report, ‘Payment adequacy: a view from those relying on social security payments’, is based on a survey of more than 600 people receiving income support payments. It highlights the plight of people living on the lowest income support payments, Newstart and Youth Allowance, with 83% saying they don’t have enough to live on, including one in five reporting they are unable to afford basic essentials like housing, food and electricity.
ACOSS CEO Dr Cassandra Goldie said, “We know that everybody who relies on income support to keep their head above water is doing it tough, but our findings confirm that people on working age payments, including Newstart/Youth Allowance, Parenting payments and Disability Support Pension, are struggling the most.
“We know the impossibility of trying to survive on $37 a day on Newstart or $30 a day on Youth Allowance. Nearly half of those on Newstart or the Youth Allowance report having unsustainable levels of personal debt, owing more than they can afford.
“Our survey also found high levels of financial stress and deprivation among people living on the Disability Support Pension and the Parenting Payment, who face higher living costs due to disability or the costs of raising children”, said Dr Goldie.
“Thirty two percent of people receiving the DSP reported going without meals in the past 12 months in an effort to save money and more than half could not afford Christmas presents.
“Housing stress is a significant issue with one in five people on the DSP paying more than 50% of their income on housing, and 24% of single parents spending half their income on housing costs.
“Governments have a duty to provide a safety net for those who need it. The reality is that we’ve allowed holes to develop in this safety net, with vulnerable groups falling through the cracks. Our budget challenge requires that we target spending carefully and take steps to strengthen the revenue base so that we can increase support for those being left behind.
“ACOSS has welcomed the important recognition by the Government that CPI indexation is inadequate for pensions. The time has come to apply consistent indexation to wages to other vital income support payments, including allowances and family payments.
“The Government must take the 2014-15 Budget cuts to young people and low income families off the table. But that is only a first step. We will also be looking to this budget to deliver a better quality of life for people on working age payments, including greater financial assistance and support for those who are unemployed.” Dr Goldie said.
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ACOSS – 0419 626 155
ACTCOSS – 0448 791 987
NCOSS – 0412 867 658
NTCOSS – 0418 482 660
QCOSS – 0423 245 252
SACOSS – 0418 805 426
TasCOSS – 0419 361 915
VCOSS – 0418 127 153
WACOSS – 0422 422 438
Summary of key findings
Adequacy of payments
- 83% of respondents on Newstart/Youth Allowance do not consider it enough to live on.
- 80% of respondents on Disability Support Pension, 73% on Parenting Payment and 78% of respondents overall do not consider their payments enough to live on.
Financial stress and deprivation
- 44% of respondents receiving Newstart or the Youth Allowances and 37% on DSP have unsustainable levels of personal debt, reporting that they owe more than they can afford.
- 52% of respondents receiving the DSP reported not being able to afford to buy Christmas presents.
- 43% of respondents receiving the DSP and 37% of those receiving the Newstart or Youth Allowance reported not being able to afford dental appointments or procedures in the last twelve months.
- 32% of respondents receiving the DSP had gone without meals in the last 12 months in an effort to save money, compared with 24% of respondents receiving the Newstart or Youth Allowance and 19% receiving Parenting Payment.
- The majority of all working age payment recipients reported turning off heating or cooling in an effort to save money.
- Respondents receiving the DSP reported the highest levels of concern of all payment types about the cost of health and medical expenses (72%), electricity (71%), and food (62%).
- The top five most common items that respondents had gone without in the last 12 months due to lack of finances were: Buying Christmas presents (31%), Dental appointments or procedures (30%), Car Service (27%), Buying presents for a loved one’s birthday (22%) and Medical appointments or procedures (19%).
- More than a quarter of respondents on the Newstart Allowance are in ‘housing crisis’, spending more than 50% of their incomes on housing costs, along with 25% of respondents on the DSP and 24% of those on Parenting Payment.
Capacity to save
- More than one in four respondents receiving Newstart spend more money than they receive each week, with another 48% reporting to ‘break even’.
Perceptions of living standards
- One in five respondents receiving the Newstart or Youth Allowance reported not having enough money for basic essentials like housing, food and electricity.
- 73% of respondents on DSP and 63% on Newstart Allowance reported their income had fallen behind the cost of living in the last two years.
- 32% of respondents on Newstart or the Youth Allowance describe themselves as poor or very poor, compared with 23% on DSP and 9% on of Age Pensioners.