People on income support bear inflationary brunt

The surging cost of living is having a devastating impact for people on income support, with six in ten eating less or reporting difficulty getting medicine or care, according to a new report by ACOSS.

The report, How JobSeeker and other income support payments are falling behind the cost of living will be launched at Parliament House Canberra on Tuesday 27 September. It surveyed 449 people living on JobSeeker, Youth Allowance and Parenting Payment between July and August 2022 to gauge how they are managing to cover the cost of basic goods and services in the face of skyrocketing living costs.

The JobSeeker Payment is just $48 a day and Youth Allowance is just $38 a day. To put these rates of payment in perspective, it costs approximately $80 to fill a small car with unleaded fuel. Median rents for a unit are around $460 per week, or $65 a day.

Among the report key findings:

  • 62% have had difficulty getting medication or medical care due to the increased cost of living.   Almost all (96%) said that the inability to cover the cost of living harmed their physical and mental health.
  • 62% are eating less or skipping meals while 71% are cutting back on meat, fresh fruit, and vegetables.
  • 96% of people renting privately are in rental stress, paying more than 30% of their income on rent, while 48% have received a rent increase in the past 6 months, with a third reporting a rise of $30 or more a week.
  • 70% of people who regularly use a car said they had difficulty travelling to work, medical appointments, or other commitments as a result of increased fuel costs.
  • More than half (57%) of respondents are shortening or taking fewer showers because of increased energy costs.  7 in 10 are cutting their use of heating. 28% currently have energy bill debt and a further 22% expect to go into debt when they receive their next bill.  46% of respondents are going to bed early to keep warm.

ACOSS acting CEO, Edwina MacDonald, said the existing income support system was woefully inadequate.

“People on low, fixed incomes were already struggling with covering basic costs before the cost of living skyrocketed. Economists and commentators speak reassuringly of ‘buffers’ but there is no buffer when your income is $48 a day, let alone in the face of surging prices for petrol, food, and rent.

“People on Jobseeker, Youth Allowance and Parenting Payment face impossible choices. No one should have to choose between food and medicine, but these are exactly the choices being forced on people in Australia, one of the world’s wealthiest nations.”

ACOSS recommends a range of measures including:

  • Lift income support payments to at least $73 a day, including JobSeeker, Youth Allowance, Austudy, Abstudy, Special Benefit and Parenting Payment. Urgent action should be taken in the October budget to address the acute crisis facing people on low, fixed incomes.
  • Index JobSeeker and related payments to wages as well as the Consumer Price Index, to ensure they maintain pace with community living standards over the long term.
  • Increase Commonwealth Rent Assistance by 50% to reduce rental stress, noting housing costs are the biggest household cost.
  • Establish a disability and illness supplement of at least $50 a week to recognise the additional costs that people with disability and chronic illness face.
  • Establish a single parent supplement that recognises the additional costs of single parenthood. This supplement should increase as children get older, given the cost of children rises as they age.

“The measures we propose are proportionate to the challenge. It is simply unfathomable to inflict more stress on people who are already struggling to cover basic costs,” Edwina MacDonald said.

Leilani, ACT, receives JobSeeker:

“Once I pay my rent, I end up with $400/fortnight to live off – trying to pay mobile and internet bills, plus feed the boys. To make ends meet we rely on loans from mum and food relief

“When my youngest turned 8 last year I was forced to switch from Parenting Payment to JobSeeker, this – reduced our income by $180/fortnight – it’s really really tough”

Mark, QLD, receives JobSeeker:

“Even with no debts and now living in public housing, we’re $350 short of being able to meet all our financial needs per month. I can’t afford to get a haircut, but I’m expected to go and look for jobs – paying for car rego is impossible, I’ve had to turn down some casual work because I can’t afford the cost of the fuel there and back to do a short job.

“Costs such as the internet at home and personal mobile aren’t covered by Jobseeker but the Government expect that I have the money to always access these services. For example, to use myGov and take calls from potential employers.”

Leilani, Mark and other people with lived experience of living on JobSeeker and income supports are available to speak to media on request.