Welfare Fix Needs Boost Not Cuts, Say Advocacy Groups

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People receiving a disability pension could be the hardest hit if the Abbott Government acts on suggestions made in an interim report on Australia’s welfare system, according to welfare advocacy groups.

The McClure report, handed down on Sunday, has urged the federal government to make major structural changes to the way welfare is administered in Australia, and to implement welfare income management, a policy the Abbott Government has hinted its considering expanding for some time.

Currently, income management — which was a central plank of the Northern Territory intervention — has been restricted to Aboriginal people, in addition to trial sites around the country. The policy sees up to 70 per cent of the person’s welfare entitlements ‘quarantined’ so that they can only be spent on items approved by the government, such as food and clothing.

While welcoming some elements of the report, welfare groups have expressed serious concern about suggestions the Disability Support Pension should be reserved for those who have a permanent disability.

Maree O’Halloran, director of the Welfare Rights Centre, said this would push people who were virtually unable to work onto much lower Newstart payments.

“It basically means that hundreds of thousands of people who are living with very significant chronic illnesses and physical or intellectual disabilities could be taken off the Disability Support Pension,” O’Halloran told New Matilda.

O’Halloran said those deemed capable of working more than two hours a week could be pushed onto far lower payments, despite the fact employers were very unlikely to take them on.

“For example, people living with cancer may still be assessed to have some work capacity — that is, more than two hours per week — and could potentially be taken off the DSP, which is tough enough on its own,” she sad.

This would leave the person $170 worse off a week.

The Australian Council of Social Service (ACOSS), the peak body for community services and the welfare sector, has aired similar concerns, calling for the government to prioritise lowering the gap between pension and allowance payments.

Director of Policy, Jacqueline Phillips told New Matilda that ACOSS acknowledged the need to increase the fairness and effectiveness of the welfare system but that the government must prioritise increasing the rate of the unemployment allowance, Newstart.

“The gap [between pensions and allowances]is the cause of many of the problems in the system in terms of the complexity of the system, but it’s also a disincentive for people to seek work,” Phillips said.

The current maximum Newstart payment for a single person with no children is $550.50 a fortnight. ACOSS are calling for an immediate $50 increase.

While acknowledging the inadequacy of allowances such as Newstart and Rent Assistance, the McClure report also says the government should consider broadening welfare management, whereby those receiving welfare are forced to spend a certain percentage of their payments on specified goods, such as food or clothing.

ACOSS and the Welfare Rights Centre have both taken issue with the proposal, claiming current programs have been costly without showing clear signs of success.

Professor Ilan Katz, who was the Chief Investigator of a 2012 report into the Northern Territory’s welfare management program, said the program had mixed successes.

“For some people it did help them, for others it made very little difference, and for some they experienced increasing hardship on income management,” Katz said.

“The point of [welfare management]is that it’s only to be spent on particular goods and services and so some people have problems, for example paying rent and buying petrol and various other things that they wanted to do with it.”

Katz’s second report on the Northern Territory experience is currently being drafted and is due to be submitted to the Federal Government in the coming weeks.

“There is now increasing evidence about what works, why it works and for who it works, and I think whatever scheme is rolled out, if it is rolled out nationally it should draw on the evidence that is available for the government so that it benefits the people actually on income management,” he said.

Phillips said that the current ‘Place-Based’ income management trials, being used in numerous locations around Australia, have cost the government $13,000 per client each year, money ACOSS believes could be far more effectively spent.

Welfare groups have also criticised the government for allowing them just six weeks to respond to the interim report, and taken a shot at the tabloid media for whipping up fears about welfare bludgers.

“What should be a review done in good faith about the best possible future for our social security system is being done in an atmosphere of government cost cutting, and also an atmosphere where the tabloid media has been beating up and stigmatising people who need the Disability Support Pension, so I don’t think that bodes well for the review,” O’Halloran said.

New Matilda was waiting for comment from the Minister for Social Services, Kevin Andrews at the time of press.

Max Chalmers

Max Chalmers is a former New Matilda journalist and editorial staff member. His main areas of interest are asylum seekers, higher education and politics.

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