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‘Major reform of social security needed’: Senate committee

Urgent “major reform of the social security system” is needed after a Senate committee found payments such as Jobseeker would need to be almost doubled to keep people above poverty levels.

A senate commitee with a Labor/Greens majority, which was looking into the adequacy of Jobseeker, Youth Allowance and the Parenting payment, has on Thursday recommended significant increases to all three to ensure people do not live in poverty.

But the government is unlikely to follow through with a permanent increase given the Coalition senators on the committee did not agree with the report, and its most senior ministers have said this week that the payments would revert back to $40 a day once the crisis is over and the coronavirus supplement has been phased out.

Newstart (now Jobseeker) has not been materially increased since 1994 and Voice of Action has spoken to recipients who said they could barely afford one meal a day and couldn’t keep up with basic care and medical expenses.

The government revealed on Thursday that the number of Jobseeker and Youth Allowance recipients had increased to 1.35 million as at April 24, up from 815,872 in February. It could be as high as 1.7 million by September.

Parliamentary Budget Office costings showed a fortnightly income of at least $1012 was required to ensure people did not live in poverty – almost double the $559 per fortnight maximum rate of Newstart/Jobseeker.

The committee recommended that the government set a national definition of poverty and conduct an immediate review of the income support system to ensure all eligible income support recipients do not live in poverty.

“Australia has one of the lowest unemployment benefit rates in the OECD,” the report found.

Greens senator Rachel Siewert, chair of the Community Affairs References Committee which prepared the report, said there was an “urgent need for a major reform of the social security system” as the inquiry process had been a “scathing assessment of our income support system”.

The $550 coronavirus supplement payment that effectively doubled Jobseeker was originally expected to last for at least six months but the Covid-19 senate committee heard today that this could be just five months given the end date is set at September 24.

The Australian Council of Social Service CEO Cassandra Goldie (pictured) said the government’s own modelling showed that up to 1.7 million people are expected to be unemployed in September, so the $550 coronavirus supplement must be extended.

“Now more than ever, we are seeing why we need to have a decent social safety net in place at all times,” said Goldie.

“The Senate heard from people skipping meals, forgoing medication, turning off their fridges to save electricity and struggling to keep a roof over their head.”

Siewert said it must not be government policy for people to live below the poverty line.

“There is clear evidence that the income support system itself is acting as a key barrier to employment because of the inadequate payment rates that force people into poverty,” said Siewert.

“The Government needs to listen to the people who bravely gave evidence of their lived experience at this inquiry. It is their voices that need to be heard.”

On Wednesday, before the release of the report, the Prime Minster Scott Morrison, Treasurer John Frydenberg and Finance Minister Matthias Cormann were all asked about a permanent increase to Newstart and all three said it would be reverted back to $40 a day as soon as the crisis was over.

“We don’t want these payments going out the door for a day longer than they have to,” Frydenberg said on Wednesday night.

The government has been under significant pressure from social services advocates, economists, academics, Labor and Greens MPs, and even some within its own ranks, to commit to permanent increases in Jobseeker after the payment was effectively doubled to deal with the crisis.

The report found people receiving the payments were too often living in poverty – unable to afford daily basic essentials and even a home – which impeded their ability to engage socially and economically in their community.

It recommends the rent assistance program be reviewed to ensure it improves rental affordability and reflects changes in rents and market conditions. There should also be a review of Austudy, ABSTUDY and the student income support system and its administration.

Funding for emergency relief housing and social housing should be increased, the report found, while out of pocket medical costs for low income earners should be further reduced.

The report also recommends improvements to Centrelink services for victims of domestic and family violence

The government should review the earnings threshold of income support payments “to ensure it does not impede jobseekers transitioning to work”.

The report recommends that the Department of Social services conduct immediate reviews of:

  • the adequacy of employment services and employment programs, which should be more individualised and strength based, ensuring employment services are not responsible for any compliance implementation
  • the impairment tables to ensure people with disability or a medical condition who cannot work will receive fit for purpose support
  • mutual obligations requirements in relation to job search activities for people unable to work due to a medical condition

The report recommends referring to the Community Affairs References committee inquiries into:

  • health inequality
  • the provision of dental care in Australia
  • the mutual obligation requirements and adequacy and effectiveness of employment programs

The committee recommends the government establish a Social Security System Expert Group led by independent experts who would ensure the payments were adequate and indexed with an appropriate benchmark.

“The committee recommended that our income support system be underpinned by a series of principles, including that social security is a human right that aims to reduce poverty, is an investment in people and that respect and dignity of the individual is at the heart of the social security system,” said Siewert.

“This extensive report which includes research and advice from well respected institutions and think tanks and most importantly income support recipients themselves highlights the urgent need for a major reform of the social security system.”


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