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‘Reintroducing the liquid asset test is mean spirited and unfair in the midst of a recession’


29 July 2020 at 12:55 pm
Rachel Siewert
If you make people spend all of their hard-earned savings before receiving income support then they are left in a precarious position, argues Greens Senator Rachel Siewert.


Rachel Siewert | 29 July 2020 at 12:55 pm


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‘Reintroducing the liquid asset test is mean spirited and unfair in the midst of a recession’
29 July 2020 at 12:55 pm

If you make people spend all of their hard-earned savings before receiving income support then they are left in a precarious position, argues Greens Senator Rachel Siewert.

We are not yet through this pandemic and the government is already rolling back economic support measures for vulnerable Australians who are struggling to make ends meet. Come September, they’ll knock the rate of JobSeeker back below the poverty line and reintroduce some of the harsh means testing measures put on hold since March.

While the low rate of income support is of course the key concern, less attention is given to the long-term effects of the “liquid assets waiting period” and its impacts on younger people, older workers facing age discrimination and the long-term unemployed.

 The liquid assets waiting period was suspended in March in recognition of the fact that people needed to receive income support as soon as possible and that it is unfair and frankly, foolish to make people “spend” their savings so they can then access income support during a pandemic.   

It is likely to create huge problems for the next wave of newly jobless, as the JobKeeper wage subsidy is tightened and many businesses realise they can no longer afford to keep staff on.

The rule is that if you have savings or other “liquid assets” over $5,500 you will have up to a maximum of 13 weeks to serve a liquid assets waiting period. That is, your first payment will be delayed.  

If you make people spend all of their hard-earned savings before receiving income support then they are left in a precarious position during the rest of this pandemic.

 For many people the only way they can survive on JobSeeker is by supplementing that income with what little savings they have. This could be the difference between hanging on with the mortgage until they find more work – or losing the family home. Taking that safety net away is not only unfair, but also irresponsible and it will have a chilling effect on the wider economy. 

Over the long term, this system entrenches poverty and disadvantage. It is risky for older workers who have lost work during the pandemic and who will have to use up their retirement savings before they can get JobSeeker. It’s particularly tenuous for older women who have found themselves out of work. 

Many older women are already in difficult situations with little super and insecure accommodation. If they lose work close to retirement age then this system is setting them up to fail. $5,500 is not a significant amount of savings to be going into retirement with, or to provide a buffer when facing long-term unemployment during a recession.

This is all happening when it is clear that the unemployment rate is still increasing. The reintroduction of the liquid asset waiting period will mean that people who are currently on JobKeeper in businesses that are not viable into the future, and hence about to become unemployed, will have to wait to access income support and are likely to be pushed into financial hardship. 

How does it make economic sense to kick people off support payments into financial stress? How will they pay their rent, mortgage payments, essential bills and eat?  

People on Newstart were unable to go to the dentist and unable to afford medication. Because $40 a day, or even the $60 a day that it will be in September, does not cover the basics and they just don’t have savings to tap into. 

If people don’t have back up, if they live in poverty long term, they end up in emergency departments, at food banks, open to exploitation and in precarious living situations. Making it even more difficult to look for work.

 What about young people who before the pandemic had been saving their income, for a house deposit, for study, for their own future financial stability? All that effort and their hopes for the future will be affected. 

Young people deserve better than this, their futures are so uncertain. Many have just entered the workforce and started getting ahead, others may not even get that opportunity for years to come. 

Mutual obligations are not necessary when there are no jobs and community transmission of COVID-19 is making it unsafe for people to be looking intensely for work. Why make vulnerable people push paper just for the sake of it?

This government has a toxic attitude to people looking for work. Telling people they will have their payments cut if they don’t take a “suitable” job will only cause further stress and anxiety in our community, and contribute to the mental ill-health that has been exacerbated by financial stress. 

Reintroducing the liquid asset test is mean spirited and unfair in the midst of a recession. 

We will see thousands retire into poverty because the government has made them wear down their savings in a job market with very limited opportunities.

The government spends so much time trying to convince us that unemployment is a personal failing, but imagine if they spent their time investing in a supportive and caring approach rather than blaming people for circumstances beyond their control. 

Instead of demonising people on income support and making their lives even more difficult, what about investing in creating jobs in areas such as the aged care, disability support and childcare sectors? These sectors are desperately underinvested in and with better support would create so many opportunities for work and a care economy that actually invests in our community. 


Rachel Siewert  |  @SenatorSiewert

Senator Rachel Siewert is the Greens spokesperson on Family and Community Services.

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One comment

  • Avatar Marty says:

    A great article. I am a young person with modest savings who lost his twice in twelve months. When the pandemic started I saved some money because in 2019 when I was made redundant it was a huge shock to me. Sadly, I lost my job last week, and Centrelink have said I have to wait 13 weeks. I am $40k in debt. I feel so utterly stupid I saved this money and didn’t pay my loans off instead. What an idiot. I will enter 2021 much worse off and it will take me much longer to recover now.

    A liquid asset test for Victorian’s isn’t fair.

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