It’s hard to imagine enjoying a rewarding career and the lifestyle that goes with it one minute and a short time down the track relying on Centrelink income to survive. But with job cuts in many industries including the finance and manufacturing sectors, this is the reality for many Australian women and their families.
A Senate Committee Inquiry currently being held in Melbourne is hearing a range of submissions from social welfare groups arguing that the Newstart unemployment allowance is not covering even the most basic living costs.
The Benevolent Society presented evidence to the Committee yesterday which calls on the Government to increase the Newstart Allowance and all other allowance payments by a minimum of $50 a week, and index the payments in the same way that pensions are indexed. It joins many other organisations in also calling for a comprehensive inquiry to be held into the allowance payment system.
The Newstart Allowance for a single adult is only $35 a day, or $245 a week. An unemployed sole parent with a school aged child gets $394, including family payments. People reliant on this payment as their main income live in poverty. There is also a $131 per week gap between Newstart Allowance and pensions.
The Benevolent Society’s General Manager of Social Policy and Research, Annette Michaux, said people surviving on the Allowance struggled to meet regular expenses and couldn’t save for bigger outlays such as car registration and insurance, replacement of furniture or whitegoods, or major health and dental care. Costs associated with looking for work, or undergoing training, may also be prohibitive.
“This inability to meet regular expenses, let alone save, forces people to rely on credit cards or high interest loans, which can rapidly push them into a cycle of deepening debt,” Michaux said.
“If we don’t provide people with intensive support to address these issues, and adequate payments to help them eat properly and keep a roof over their heads, we’re not going to be able to help them into jobs.”
A serious illness of a parent or child can mean the difference between financial stability and the sudden realisation you are struggling to get by on government income support.
In its Inquiry submission, the Society shared the story of Maree, a mother of two children, who was forced to leave her job to care for her young son when he became seriously ill and required multiple operations. While Maree’s son made a full recovery, the stress of the situation and her caring role took its toll on Maree’s health and she began to suffer from depression, making it difficult for her to search for work.
Maree went on to Newstart Allowance but the family was under considerable financial strain due to her unemployment and her son’s medical bills.
“To make ends meet Maree approached community welfare organisations for emergency relief when necessary,” the submission said. “All of the family’s clothes and most of their household items were purchased at second-hand stores. They could not afford family outings, nor could the children participate in sport or school excursions.”
Michaux said the Benevolent Society was particularly concerned about the impact of the low rate of Newstart Allowance on children, especially as the number of parents on Newstart was due to increase in January.
From January 2013, many sole parents will have their payments reduced by $118 a fortnight, as they are moved from the Parenting Payment to the Newstart Allowance, and they will also be able to earn only $31 a week before their payment is affected. They could previously earn up to $88.30 plus $12.30 for each additional child per week’ and still claim their full payment.
“With around half of the sole parents on the Parenting Payment already working part-time, shifting them onto the Newstart Allowance will not be an incentive to work, it will simply reduce their total income and further entrench them in poverty,” Michaux said.