14 October 2022
One in eight people in Australia, including one in six children are living in poverty, a new report released on the eve of Anti-Poverty Week has found, as cost of living pressures continue to put households under strain.
As many as 13.4 per cent of the population (or 3.3 million people) and 16.6 per cent of children (or 761,000 kids) were living below the poverty line in the first year of the pandemic (2019-20), according to the Poverty In Australia 2022 report by the Australian Council of Social Service and UNSW Sydney, using the latest available data from the ABS.
The study also revealed people in poverty are falling further behind the rest of society, with their average weekly incomes dropping to $304 below the poverty line.
The report found that temporary income supports introduced during COVID lockdowns in 2020 – the Coronavirus Supplement and Economic Support Payment – pulled 646,000 people, including 245,000 children, above the poverty line. Those new supports almost doubled the lowest income support payments, including the JobSeeker Payment.
These results demonstrate that Australia can swiftly reduce poverty by raising income supports.
In the first three months of 2020, as large parts of the economy were shut down by Covid restrictions and thousands were put out of work, the poverty rate soared to 14.6 per cent.
But boosted income support payments announced in April that year saw the poverty rate drop to a 17-year-low of 12 per cent over the next three months.
The effect of the boosted payments on children was even more dramatic, reducing the child poverty rate from 19 per cent in the March quarter of 2020 to a 20-year low of 13.7 per cent in the June quarter of 2020, lifting 245,000 children above the poverty line.
The extra income meant that single adults receiving social security payments went from being $134 a week below the poverty line in March to $146 above it in June 2020, while couples with two children went from being $187 below the poverty line to $361 above it at the same time. However, by April 2021, Coronavirus Supplement (initially $275 a week) was abolished and in its place Jobseeker and related payments were increased by just $25 a week.
Professor Carla Treloar, Director of the Social Policy Research Centre at UNSW Sydney, said the report highlights the unacceptable levels of poverty in our nation.
‘Australia is one of the wealthiest countries in the world, yet we have one in eight people and one in six children living below the poverty line,’ she said.
‘There are 3.3 million people in Australia desperately struggling to pay the bills and put food on the table. There are 761,000 children who are denied a good start to life.’
ACOSS CEO Dr Cassandra Goldie said: ‘These figures should be a source of great shame for our nation. We can and must do better.
Dr Goldie also said the study showed there is a clear way to reduce poverty in Australia: ‘Almost doubling the JobSeeker rate pulled 646,000 people out of poverty in 2020. That is a huge advance in an incredibly short period of time.’
‘The increased payments reduced child poverty by a massive 5.3 per cent, giving 245,000 kids in Australia the chance of a better future.
‘The report shows that the solutions to ending poverty in Australia are clear. Increasing Jobseeker and related payments to at least $73 a day is a crucial first step, as well as an increase to Commonwealth Rent Assistance and a substantial investment in social housing so that there are enough affordable homes for people on the lowest incomes. We must also invest in energy efficiency and solar retrofits for low-income homes.
‘As it develops its approach to a well-being budget, the Federal Government should prioritise including specific targets and strategies for reducing poverty to ensure that no one is left behind.
‘ACOSS agrees with the Treasurer that we need to have a conversation about how we can grow the revenue Australia needs to pay for the essential services and safety net we need, to end poverty and deliver wellbeing and we are keen to work with the government on this.’
Read the report at: https://bit.ly/PovertySnapshot
Key findings in the report:
- The poverty line (based on 50% of median household after-tax income) is $489 a week for a single adult and $1,027 a week for a couple with two children, according to the latest available data from the ABS (2019-20).
- More than one in eight people in Australia (13.4 per cent) lived below the poverty line in 2019-20, the first year of the pandemic. That amounts to 3,319,000 people.
- One in six children (16.6 per cent) live in poverty. That amounts to 761,000 children.
- The poverty rate soared to 14.6 per cent in the March quarter of 2020 due to Covid-19 restrictions.
- But it fell to 12 per cent – a 17 year low – in the June quarter of 2020 due to boosted income support payments – The boosted payments brought 646,000 people – or 2.6 per cent of all people – out of poverty.
- The child poverty rate rose from 16.2 per cent in the September quarter of 2019 to 19 per cent in the March quarter of 2020, then fell to 13.7 per cent – a two-decade low – in June 2020.
- Average weekly incomes of people in poverty (from different-sized families) are $304 below the poverty line. This is known as the poverty gap.
- The poverty gap increased steadily from $168 a week in 1999 to $323 in March 2020 and fell to $310 in June 2020 due to the extra Covid-19 income support.
- Boosted income support pushed weekly social security payments for single adults with no private income from $134 below the poverty line to $146 above it. Single parents with two children went from $119 below to $176 above the poverty line. Couples with no children went from being $152 below to $411 above the poverty line while couples with two children went from being $187 below the poverty line to $361 above it.
The study was based on ABS data for the 2019-20 financial year, which is the latest available. The 13.4 per cent poverty rate and 16.6 per cent child poverty rate are the yearly average.
The poverty line is defined as 50 per cent of median after-tax household income, adjusted for household size.