17 October 2021
The income gap between people without paid work and sole parents, and the broader community is widening, according to a new study tracking income support over two decades.
Australian Income Support Since 2000: Those Left Behind, will be launched today by the ACOSS/UNSW Sydney Poverty and Inequality Partnership to mark Anti-Poverty Week.
The report notes median household incomes have grown 45% since June 2000 with Age and Disability Support Pensions almost keeping pace.
“People receiving unemployment and single parent income support payments have been badly cast adrift,” said Dr Cassandra Goldie, CEO of ACOSS. “Those doing it toughest have been held further behind, making it that much harder to look after their health and families, as well as participate in the workforce.
“Apart from the brief period when the Coronavirus supplement was paid, the performance of the income support system during this period of robust economic growth has left whole groups of people further and further behind the rest of the community.”
Professor Carla Treloar, Director of the Social Policy Research Centre and the Centre for Social Research in Health at UNSW, said there was a clear discrepancy between different forms of income support.
“This research poses serious questions about Australia’s income support system. If it’s good enough for the Age Pension to keep pace with broader income growth we need to ask why the same principle does not apply to support for the unemployed and sole parents,” Professor Treloar said.
The Disability Support Pension has the same base payment rate as Age Pension, and so single DSP recipients similarly benefited from a substantial increase in payments in 2009.
However, that did not benefit all people living with a disability due to eligibility constraints. The percentage of people with a partial capacity to work receiving unemployment payments (rather than for e.g. the Disability Support Pension) increased from 5% in 2007 to 33% in 2021.
Eligibility constraints also affected sole parents, Professor Treloar noted.
“A series of policy changes have seen many single parents moved on to lower payment categories such as JobSeeker over the past two decades. As a result, the after-tax income of single parents receiving income support payments has plummeted since 2006.”
- From June 2000 to 2021, Australia’s median household income has grown by 45 % in real terms, and the minimum wage has risen by 23.5%.
- Over the same period, the single Pension rose by 52%
- For sole parents with a child under eight, their payments have risen by 27.2%, whilst the payments of those with children over eight rose by just 7.9% over the twenty year period.
- JobSeeker Payment rose by 12% in real terms, almost entirely because of the $25pw increase to the base rate in April 2021 (there was a small increase in 2013 when the Energy Supplement was introduced). The last time the base rate of the payment was lifted above CPI was in 1994 when it rose by just $2.95pw.
- The unemployment payment rate has fallen in comparison with the minimum wage since 2000 (from 50% down to 41% of replacement value), apart from the period when the Coronavirus Supplement was paid
- The percentage of people receiving the lower unemployment payment who have a partial capacity to work (who may have previously been eligible for the DSP) has increased from 5% in 2007 to 33% in 2021
- The percentage of sole parents receiving the lower unemployment payment JobSeeker has increased from 0% in 2000 to 28% in 2021.
- The payment rate of the Age Pension and the Disability Support Pension is much higher than that of JobSeeker when compared with the minimum wage.
Quotes from Poverty and Inequality Partnership supporters:
“This report shows that inequality has been going up for the past two decades. People on income payments are being left behind.
“It also shows that lifting payments above the poverty line would be the best way to tackle inequality.
“It’s time for to the Government to end the poverty trap for good, instead of leaving people behind.”
Kasy Chambers, Executive Director, Anglicare
“An adequate income for all is vital to ensure a healthy community. This report makes it clear that income support payments are well below the minimum wage, preventing people from being able to afford life’s essentials – housing, nutritious food, health care and medicines. As one of Australia’s largest community health organisations cohealth sees the impact of poverty on health status every day. The Coronavirus Supplement provided a brief reprieve for people struggling to survive and demonstrated the difference an adequate income makes to the lives and health of individuals and families. The government must urgently raise the rate of JobSeeker payment to a level that enables people to live a healthy life, free of hardship.”
Nicole Bartholomeusz, Chief Executive, cohealth
“A refusal to accept the existence of poverty and its causes creates the conditions for nothing to be done about it. But poverty is real. It traps too many surviving on income support and many more who are in low-paid work.
“In 2020, robust additional COVID income supports significantly reduced poverty in Australia and demonstrated what can be achieved when the political will exists to achieve it. When that payment was removed, and during 2021 lockdowns, most people on the lowest income support payments have been denied extra support, leaving them to try to survive and seek work on payments such as the manifestly inadequate $45 a day JobSeeker Payment.
“A permanent increase to income support payments would ensure all people are properly supported in the recovery ahead and help to end poverty-induced homelessness in Australia.”
James Toomey, Mission Australia CEO
“Australian Communities Foundation is a proud supporter of the Poverty and Inequality Partnership, whose latest report reveals just how far JobSeeker and Parenting Payments are falling behind. Ensuring all Australians have access to income support above the poverty line is a critical step on the journey towards a fairer and more sustainable Australia and we commend ACOSS on the publication of this important research.”
Maree Sidey, Chief Executive Officer, Australian Communities Foundation
“Let us indeed Build Back Fairer!”
Dr David Morawetz, Founder and Director, Social Justice Fund