New Year heralds good and bad news for low income Australians

“2012 heralds some welcome and some not so welcome changes for disadvantaged and low income households. Most beneficial is the significant boost to Family Tax Benefit A for older students aged 16-19. A further, small but welcome bonus is the 10,000 six-month wage subsidies on offer to Australia’s 230,000 unemployed people who have been out of work for over two years. Both of these are really important reforms and we congratulate the Government on these measures.

“But tougher, new impairment tables for Disability Support Pension and inadequate increases to Youth Allowance paid to young people could mean that it won’t be a very happy new year for many people already doing it tough. New participation requirements for teen parents will also require close monitoring to ensure that the young people are protected and supported,” said Cassandra Goldie, CEO of the Australian Council of Social Service (ACOSS) and Maree O’Halloran, President of the National Welfare Rights Network today.

“Stricter impairment tables are expected to dramatically reduce new successful claims for the Disability Support Pension (DSP). A recent government trial found that 38 per cent of those currently qualifying would not do so under the tougher rules. Existing disability support pensioners will be reviewed under the revised tables. Anyone not qualified will be moved onto the Newstart Allowance of $243, which is $131 per week less than the pension. In 2010-11, before the new rules, successful DSP claims fell by 11.5 per cent, to 58.2 per cent.

“The rate of Youth Allowance for a single person over 18 year old living away from home increases to $201 a week, a rise of just $7. Youth Allowance is $42 a week less than Newstart Allowance and $173 a week less than the pension. Payments for pensions and Newstart Allowance are indexed each March and September, but the rate for young people is adjusted in line with the Consumer Price Index just once a year.

“Youth Allowance is paid to students and people under 21 looking for work. The same rates are paid to young Aboriginal people, students on ABSTUDY and to the Austudy Payment, a payment for mature age students. Many people are surviving on just $28 a day on these payments.

“The current rates of payments for young people barely meet rising living costs and are insufficient to cover the costs of study or job search. ACOSS and Welfare Rights urge the Government to increase Youth Allowance as well as Newstart Allowance by a minimum of $50 a week and to index both more fairly.

“Young parents in 10 locations could have their payments suspended for not attending Centrelink interviews and for not entering into or fulfilling a participation plan. It is extremely important that young parents are not left stranded without income support.

“Finally, we welcome the expanded options for young people considering undertaking higher education. From 1 January 2012 the age of independence for Youth Allowance (student) will be reduced from 23 to 22 and access to the workforce independence criteria for inner regional students will be expanded. Unfortunately, some scholarships will be reduced to pay for these benefits.”

For comment: Cassandra Goldie, CEO ACOSS: 0419 626 155; Maree O’Halloran, President, National Welfare Rights Network ring Gerard Thomas, Media and Policy Officer: 0425 296 882.