Government Review Should Ease Hardship and Modernise Social Security

12 August 2008

ACOSS has responded to the pension review background paper released today by the Hon Jenny Macklin MP, Minister for Families, Housing, Community Services and Indigenous Affairs.

“Pensioners, sole parents, people with disabilities and unemployed people are caught between low social security payments and rising rents, food and fuel prices. The Government’s review of taxes and transfers should develop proposals to reform the social security system so that it does its most important job – to prevent poverty in the midst of prosperity,” ACOSS President Lin Hatfield Dodds said today.

The report reveals the low level of payments received by social security recipients. A single pensioner receives $277 per week, taking account of telephone and pharmaceutical allowances. A single unemployed adult receives just $219 and a sole parent with two school age children must get by on $433. Maximum Rent Assistance for low income tenants is $71 per week, a small fraction of the escalating rents across most parts of Australia.

Social security payments are not only too low, they are also unfair. People in similar situations receive different levels of payment. For example, people with a disability on NewStart Allowance receive $58 a week less than those on the Disability Support Pension, which discourages people on the pension from searching for a job and leaves people on NewStart Allowance with very low levels of income.

The $500 Utilities Allowance offers some relief for pensioners from rising energy prices, but more help is likely to be needed and sole parents and unemployed people currently miss out on this assistance.

While the review should look at ways to relieve the financial stress of social security recipients in the short term, the longer term task is to modernise the social security system. This means carefully examining the system as a whole, including the adequacy of all payments, anomalies in levels of payments, the growing complexity of the system, and how best to encourage those who are able to work to upgrade their skills and find a job.