Mind the Gap: People on Newstart falling further behind

20 September 2012

The Australian Council of Social Service is urging the Federal Government to move to index allowance payments such as Newstart to wage movements to prevent people from falling into worsening poverty.

“Today is indeed a good day for more than 3.5 million Australian pensioners who will receive a boost to their payments to help them keep up with the cost of living. But people living on allowance payments like Newstart remain the forgotten ones, and left to live on as little as $35 a day,” said ACOSS CEO Dr Cassandra Goldie.

“Whereas people on the Age Pension, Carer Payment and adult Disability Support Pension, as well as veteran income support recipients, will receive an extra $9 a week from today, those on Newstart Allowance – who are already living on significantly less – will only receive an extra $1 a week.

“This increases the ‘poverty gap’ between pensions and Newstart even further to $140 per week. This is because pensions are indexed to wages as well as the Consumer Price Index, whereas allowances are only pegged to the CPI. The CPI clearly does not reflect the real community cost of living which we know is affecting people on these lowest incomes the worst.

“Since the pension was increased in 2009, pension payments have risen by $50 a week compared to just $18 a week increase to allowances due to the different indexation. The gap between the two payments has grown by $32 a week over three years, or $10 per week per year. At this rate the Newstart Allowance will be worth just half the pension rate by 2030.

“People on Newstart Allowance cannot meet their daily living expenses on $35 a day and Rent Assistance payments of up to $60 a week for singles only cover a fraction of today’s rents. People can’t search for jobs and train on that income.

“Those on allowance payments are one of the largest groups to turn to charities and community groups for financial help, which is placing a great strain on services.

“We need to lift the rate for single people by $50 per week to help close this gap. We strongly support the Australian Greens motion put forward in the Senate today calling for the Government to reform indexation of allowances as a matter of urgency. We also trust the federal government will listen to the weight of powerful evidence put forward by as many as 70 submissions to the current Senate Inquiry which is due to report in November,” Dr Goldie said.

Media Contact: Fernando de Freitas 0419 626 155

Find out more about the $35 a day is not enough! campaign >>

Editorial: Fruitless search for jobless who can live on $35 a day – by Cassandra Goldie and Maree O’Halloran in National Times, Thursday September 6, 2012

Increases in pensions and allowances since 2009 ($pw)







$  58.25









Increases in $

Increase in Sept 12

$  17.10

$     2.90

$  14.20

Increase since Sept 09

$  50.40

$  18.30

$  32.05

Increase since Mar 09


$  19.65

$  81.75