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NFPs Call for Fair and Supported Welfare System

1 July 2014 at 10:49 am
Staff Reporter
Peak Not for Profit bodies and welfare organisations have warned that the reform of Australia’s welfare system should ensure that no disadvantaged group is worse off, that payments are targeted to need and that the system supports employment participation.

Staff Reporter | 1 July 2014 at 10:49 am


NFPs Call for Fair and Supported Welfare System
1 July 2014 at 10:49 am

Peak Not for Profit bodies and welfare organisations have warned that the reform of Australia’s welfare system should ensure that no disadvantaged group is worse off, that payments are targeted to need and that the system supports employment participation.

The warning comes after the Federal Government released its interim welfare reform report called A New System for Better Employment and Social Outcomes, which recommends changes to welfare payment including cuts to the Disability Support Pension.

The sector has also warned that a six-week consultation period is inadequate.

The investigation into Australia’s welfare system is being led by former Mission Australia CEO Patrick McClure.

“The current review is an opportunity for the Government to reset its income support reform agenda, away from reducing payments and towards reducing poverty, system complexity, and exclusion from employment,” ACOSS CEO Dr Cassandra Goldie said.

“We will be looking to the Government to engage with the sector and affected individuals as partners in reform.

“However, we are concerned that the six weeks for consultation is inadequate to enable people to get to grips with these complex issues and participate meaningfully in the Review. The lesson from the Budget is that Governments have to listen the community and bring people with them if reform is to be achieved.

“Real welfare reform is not about shifting people, including people with disabilities, sole parents or carers, from one payment to another. We need to change the system: from a labyrinth of higher and lower payments based on degrees of ‘deservingness’ towards a simpler one based on financial need. Once it meets people’s basic financial needs, income support should connect them with employment opportunities and supports.

“The strengths of the report are its focus on reforming the whole payments system rather than changes at the margin, its recognition that payments for unemployed people and students and many sole parents are inadequate, and its emphasis on building bridges between income support and employment through employment services and social supports.

“The Report’s main weaknesses are that it does not take payment simplification far enough and it takes activity requirements too far. It proposes to retain different levels of payment for pensions, unemployment and student payments regardless of financial need.

“It advocates new requirements for people receiving income support that go well beyond training and finding employment, including requirements for the care of children and management of their budgets. The use of income support as a form of social engineering is unnecessary, intrusive and wasteful.

“Like many reports before it, the interim report once again shines a spotlight on the inadequacy of Newstart and student payments. We welcome the recognition that the gap between pensions is unfair and counterproductive,” Dr Goldie said.

ACOSS said that while there were a number of positive reform directions flagged in the interim report, it was concerned that some proposals could leave vulnerable people at greater risk of poverty and with less autonomy over their lives.

“The apparent retreat from the much simpler model proposed by Mr McClure in his 2001 report of a single payment benchmarked to basic costs of living standards with supplements to meet additional costs, for example those related to job search, disability, sole parenthood, is disappointing,” Dr Goldie said.

“The four-tier system proposed is likely to retain unfair and complex distinctions between payment levels for students, those who are unemployed and pension recipients. Inherent in this model is the risk that people will continue to be moved from higher to lower payments as part of ‘welfare to work’ policies, a concern already raised by disability advocates. This would further impoverish people of working age on income support.”

Welfare organisation Anglicare Australia warned that the Federal Government’s interim report on welfare reform doesn't answer the big questions on adequate income and job creation.

“We are very concerned with the plan to shift more people off the Disability Pension onto Newstart, or something similar,” Anglicare Australia acting Executive Director Roland Manderson said.

“Firstly there are not the jobs available for people with disability to fill. Secondly, the Disability Pension already only goes to people who really are extensively incapacitated.

“The talk about giving people more incentive to work can end up as code for undermining their security, and allow others to blame them for their circumstances.”

Manderson said the underlying issue was that pensions and allowances were simply too low.

UnitingCare Australia said it was encouraged by the foundations being laid by the review.

“We all agree that a simple, efficient and adequate system is important and that we need to make sure people are being supported effectively. The critical thing is to ensure that these priorities remain forefront for any recommendations made,” Lin Hatfield Dodds, National Director of UnitingCare Australia, said.

“The Interim Report rightly recognises the importance of building individual, community and family capabilities; the need for a simpler system; the importance of adequately supporting people; and the need to help people build their capabilities and to reach their potential. It is also positive to see recognition that income support needs to work in tandem with social support.

“For people without paid employment who are also battling with a range of complex issues such as illness or a lack of job skills, a pay check is crucial, but it is not always enough on its own.

“Social services, like those provided by the organisations in our network, are vital to giving people the individualised services, personal support and encouragement that they need.

“One of the critical things going forward will be ensuring that short-term cost savings don’t become synonymous with efficiency.”

The interim review recommended cuts to the Disability Support Pension – where only people with a permanent disability could receive the payment.

The Report has also questioned the age at which young people can receive income support in their own right.

Minister for Social Services Kevin Andrews said the interim review had put forward a simplified payments structure with four basic payment types, among other potential reforms.

“Australia’s current welfare system is incredibly unwieldy, with around 20 payments and 55 supplements which is complex to administer and difficult for individuals to access and understand,” Andrews said at the review launch.

The National Welfare Rights Network (NWRN) said it hoped that the McClure Report was about establishing a fair social security and services system into the future.  

“If this is to be the case, the review process must be clearly and definitely separated from Government cost-cutting,” Maree O’Halloran, President of the National Welfare Rights Network said.

“There are ideas in the McClure report worth pursuing and it might lead to a simpler welfare system, such as changes to family payments and payments for young people.

“The key question for NWRN is, are the proposals fair and will they assist people into sustainable employment? The NWRN opposes a cost-cutting agenda that will leave people in a financially worse position than currently.

“A system of top ups could bring benefits for some groups who miss out, such as the 130,000 people with disabilities on Newstart, but this idea needs careful consideration.  It could cause much more complexity in the system and be expensive to administer.

“Care must be taken in denying access to the Disability Support Pension for all but the most severely disabled because it is bound to cause extreme hardship and poverty, unless action is taken to ensure that what replaces DSP for such people is at least equivalent to the rate of DSP.

“The welfare and community sector want to be involved in welfare reform in an atmosphere of goodwill and good faith. The six week consultation time will allow for input, though many groups are busy responding to budget proposals and tendering for funding. Some things should be ruled out in the meantime so that we can all turn our minds to the best system we can provide.”

The following Interim Report documents are available at

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