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Welfare Reform in a Tight Budget

11 May 2011 at 12:32 pm
Staff Reporter
The 2011 Federal Budget has a strong focus on moving people off welfare and into the workforce, through measures such as providing wage subsidies for the long-term unemployed and tightening the Disability Support Pension - however welfare groups have labeled the 'get tough' measures as counter-productive.

Staff Reporter | 11 May 2011 at 12:32 pm


Welfare Reform in a Tight Budget
11 May 2011 at 12:32 pm

The 2011 Federal Budget has a strong focus on moving people off welfare and into the workforce, through measures such as providing wage subsidies for the long-term unemployed and tightening the Disability Support Pension – however welfare groups have labeled the 'get tough' measures as counter-productive.

In his budget speech, Treasurer Wayne Swan says in a growing economy like Australia’s, having the fourth highest proportion of jobless families in the developed world cannot be justified.

To get more people into the workforce, Swan says the Government will cut effective tax rates for 50,000 single parents by up to 20 cents in the dollar, invest $80 million in their skills, and transition more parents with high school kids onto job search payments.

Tax breaks that encourage people without kids to stay at home will be removed, and the Dependant Spouse Tax Offset will be phased out.

Swan says the government will invest $233 million in new support programs and 35,000 wage subsidies to encourage employers to take on staff that have been out of the workforce for more than two years.

To slow the growth of the Disability Support Pensions, which is now provided to an estimated 800,000 Australians, Swan says the government will bring forward strict new work tests, update the definition of incapacity, introduce new requirements for younger recipients, provide more wage subsidies, and allow more hours to be worked before payments are suspended.

Swan says the Budget addresses entrenched disadvantage through the introduction of participation plans for teen parents, new requirements for jobless families, extending controversial income management programs, and development of new place?based programs to support local and regional employment.

The Budget includes a significant boost for mental health services, with $1.5 billion provided for new mental health initiatives that Swan says focus on support for the seriously ill.

$419 million will be invested in headspace – the youth focussed early-intervention mental health foundation – and Early Psychosis Prevention and Intervention Centres.

The Budget also includes funding to establish a new National Mental Health Commission that will drive future reforms.

National peak welfare body the Australian Council of Social Service welcomes what it says is a modest investment in wage subsidies for unemployed people and the easing of income tests to improve work incentives, but is critical of benefit cuts for sole parents and young people on New Start Allowance.

ACOSS CEO Dr Cassandra Goldie says while the budget holds promise – removing the barriers to paid employment for some Australians – the ‘get tough measures’ are unnecessary and will be counter-productive.

Dr Goldie says the Budget had to be tough on waste, not welfare, and therefore ACOSS is pleased to see measures on the healthcare rebate, the tightening of fringe benefit tax on company cars, the dependant spouse offset and the removal of the low income tax offset for investment income of children. She also says ACOSS is delighted with the National Mental Health Reform Package, an overdue step that should find broad support.

However she says the government has made a mistake by imposing ‘activity requirements’ on people on social security, which she says in many cases won’t help them into employment.
She says ACOSS is particularly concerned about the $56 per week reduction in payments for some groups of single parents with teenage children and the $43 per week reduction in payments for unemployed 21 year-olds.

In an article in the Sydney Morning Herald, journalist Adele Horin says the Budget’s ‘tough-love’ approach to welfare is a brave move, but warns that the right people need to get the toughness.

Horin says the changes to the Disability Support Pension means that for the first time disability pensioners aged under 35 with some capacity for even a day's work a week will be compelled to attend Centrelink interviews to prepare for their future. She says the new applicants will need to prove they have tried to find a job over the past 18 months.

She says never before has an Australian government required existing recipients of the disability pension to do anything to receive their benefit, and such a move has been considered political suicide.

She says the toughening of the disability support pension is a way of diverting thousands of people onto the cheaper, poverty-level Newstart Allowance.

At the moment, the maximum payout for a single person on the disability support pension is $670 per fortnight, compared to the $474.90 per fortnight for a single person with no children on Newstart. 


  • Anonymous says:

    There is all this give to the carers of children but nothing for those who support disabled adults. My wife in her 60’s looks after me. I am a paraplegic who worked for about 12 years after doctors left me paralysed. I retired at about age 50 because my bowel and bladder accidents were beginning to become more frequent and more embarrassing and acting upon the recommendations of my specialists. My wife cleans me up and helps me shower. At first glance I do not appear to have any problems because I walk with aid around my home and garden however for longer distances I require a wheelchair. I have no real balance and feel unnerved when around children or crowds and I have no pets for the same reason. It worries me that those who set the rules have no genuine idea of what it is like to live in my shoes or those of my wife who has had a hip a replacement and shoulder operations on both courtesy of the work she does for me. I am 5′ 7″ weigh 10 stone whilst my wife is only 5′ 3″ and does all the lifting and shifting in our home including me.

  • Linda says:

    I have an 18 year old daughter on a disability pension who wants to work a couple of days a week. Enough to feel a little independent without worsening her medical condition. She has contacted our local disability employment agency a couple of times but has never even had a call back. Perhaps the government should be looking at this aspect instead of penalising her.

    • Anonymous says:

      I feel for the 18 year old and having once been in this position before and now on aged pension and by the way I worked in a voluntary capacity and some paid work for years during that time. No one really wants to be disabled and not doing anything with their lives. At 18 years I was not disabled and had a full life so I cannot help but feel compassion for young people who face this kind of scrutiny by where they may feel guilty due to their capacity not to be able to work like others their age. In so far the employment agency not calling back then one can only expect more of this kind of behaviour from agencies given the task of helping people toward employment.

      One has to ask the Government have they got thru capacity to deal with all the people trying to get back into the workplace and the kind of jobs that will be flexible for them to work in.

  • Kaye says:

    My daughter is applying for the Disability support pension and having trouble getting approved aalthough centerlink can see that she is in need of this support they want all 20 points coverd we attended a medical centre and to get a doctor to help is really difficult. we found one that fill half out but because he is one of many to see her he was relunctant to cover the last question is the patient likeley to stay the same over the next two years. this is causing my daughter great stress and anxiety. is it possible to receive the support without all 20 points covered.


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