Newstart Change Will Push Under-30s into Poverty - ACOSS

Welfare peak body, the Australian Council of Social Service, has called on the Federal Government to drop its plan to deny unemployed people under 30 access to income support for six months, saying it will force people to beg for charity.

From January 1, 2015, the Government wants new recipients of Newstart and Youth Allowance under the age of 30 years old to wait six months before they receive these payments, in a bid to encourage young people to “earn or learn”.

However Australian Greens spokesperson on family and community services Senator Rachel Siewert said it was revealed in Senate Estimates that the Department of Social Services had confirmed that $229 million has been allocated to deal with the expected 550,000 job seekers who would need emergency relief over the next four years.

ACOSS Chief Executive Officer Dr Cassandra Goldie said it was a shocking revelation that government policy makers were well aware that many more young people who can’t get paid work will be forced into begging for charity when they were cut off income support.

“It makes no sense for the government to pursue a policy that will cause this level of hardship and does little to give young people a sense of hope and self worth through getting a foothold into a real job,” Dr Goldie said.

“Frontline agencies working with young people looking for work have made clear that depriving young people of payments and employment services will make it tougher for them to get ahead, especially those with no family support or from in families living on low incomes.”

Dr Goldie said the focus should be on opening up job opportunities for young people, in collaboration with business leaders, investors, local communities and social services.

“A more effective way to address youth and long-term unemployment is to invest in overcoming skills and capability related barriers to work,” she said.

“Instead of penalising young people the government should invest in programs we know to be effective like Youth Connections which has been discontinued. They should also increase the availability of places in cost-effective wage subsidy programs like Wage Connect.

"It’s disappointing that the Budget has cut funding to important career counselling and vocational programs such as Youth Connections, which has assisted over 74,000 young people since 2010. Ninety-three per cent of participants in this program were still engaged in study or paid work six months after completing the program in 2012 with most no longer receiving Centrelink payments.

"Similarly, 47 per cent of people out of work for over two years assisted by the Wage Connect wage subsidy scheme retained their positions after the program ended, which is more than double the results achieved under the work for the dole scheme.

"The government has announced that it will pay subsidies of up to $10,000 over two years to employers who hire mature workers over the age of 50. This initiative should be extended to other groups locked out of the labour market, including young people.”

The Australian Greens said  the Government was fully aware of how severe their cruel welfare changes were for young people and were planning for a spike in demand for emergency relief.

"This Government knows that they're about to subject hundreds of thousands of people under the age of 30 to substantial hardship, and that these people are going to have to seek emergency relief in order to survive," Senator Siewert said.

"Forcing people to live for six months or more without income support will push people into poverty, and in Senate Estimates last night the Department of Social Services confirmed that $229 million had been allocated to deal with the expected 550,000 job seekers who will need emergency relief over the next four years.

"The loss of income support for six months is a massive hit. The Government is making a cruel and calculated decision to expose people to deep disadvantage.

"The Department and the Government have not provided the details or evidence to justify their approach, they can't even explain why they've picked six months as the time period to deprive people of payments.

"The Government claims this is about encouraging people into work, but as we've found out [in Senate Estimates is], even if you're doing part-time or casual work, you can still be subject to these new measures.

"If the Prime Minister thinks that young people are living on easy street, he is sadly mistaken. He needs to re-think this appalling policy.”