Our government’s new poverty trap
“NewStart Allowance is a Procrustean one-size fits all poverty trap for people with disabilities,” Marie Coleman said today.
“Did the Treasurer look back to Greek mythology for inspiration on how to save money from people with disabilities?
“Procrustes was a mythological inn-keeper who made his guests fit his one-size bed: too short, put them on the rack; too long, lop off the extremities.
“Since its inception, post World War 1, the Australian social security system has recognised that different personal situations require different responses. A widow with young children has different needs from an eighteen-year old job-seeker living at home. An individual with a severe mental health problem has a different set of needs from a university student. Previous Governments have always recognised this.
“Now our Government says that someone suffering from intermittent bouts of mental illness, sometimes able to work, sometimes not, must be treated the same as a deserted wife with three small children, the same as the eighteen-year old job seeker.
“That’s the underlying logic of this move to abolish pensions from 2006, and to place new applicants onto Newstart Allowance. Yet if they are working for 15 hours a week on the minimum wage ($191 a week) a person with a disability will be about $100 a week worse off. “Looks simple. Procrustes would be proud. But, do Australians want to sleep in this bed?
“Every Australian woman contemplating the insecure future for her adult child with an intellectual disability, every Australian woman supporting her husband with severe depression, every Australian woman who suffers the onset of a disease such as multiple sclerosis says, ‘NO, Prime Minister. Stop right now.’
“Every fair-minded Australian should be writing to the Prime Minister at Parliament House in Canberra to say, ‘This is not a fair go. Every age pensioner, every veteran pensioner should be asking, ‘Will I be next?’” Write to your local Member as well. Now, read on for the hard cold facts.
Marie Coleman
Chair NFAW Social Policy Committee 0414 483 067
Julia Perry 0418 404 201
What is the policy change?
In July 2006, our Commonwealth Government intends to take away the pension from sole parents with children aged 6 or over and from people with disabilities who have the capacity to work at least 15 hours a week.
These people will have to go onto Newstart (the dole) and look for work of at least 15 hours a week. Sole parents and people with disabilities on Newstart will retain eligibility for pensioners’ concession cards and pharmaceutical allowance.
Sole parents who are already on a pension at that time will be able to stay on it unless they leave to go to work or reconcile/repartner.
People with disabilities who are on the pension at May 2005 will continue to be entitled to the pension.
How will people be affected?
Newstart is paid at lower rates and has tougher means tests than the pensions. The Newstart income test, in combination with the income tax regime, creates severe disincentives to part-time work. It means that net returns from earnings are shockingly low.
If the individual does not have a job, their payment will be cut by $29 a week (11%) for a sole parent and $46 a week (18%) for a person with a disability.
Sole parents and people with disabilities are at greater risk of poverty than people without disabilities or caring responsibilities.
If they are working for 15 hours a week on the minimum wage ($191 a week), sole parents will be at least $90 a week worse off than at present. People with disabilities will be about $100 a week worse off.
What do we want?
The Government ought to keep sole parents and people with disabilities on the pension and, if necessary, require them to take action to return to the labour force. (A recent press release by Minister Dutton states that they are already returning to work in large numbers, so we question whether force is necessary at this time).
Leaving them on pension would allow the requirements to be tailored to their special circumstances, such as taking account of the availability of transport, the cost and time of travel, the availability and cost of child care, the suitability of hours of work, their need for education and so on.
We should have recognition and actions to address the disparities which exist to reduce work participation chances for women with disabilities.
We should have reasonable modification of the Mutual Obligation requirements under the Newstart Allowance in recognition of the significant restrictions which reduce job choices for people with disabilities, parents of children with disabilities and sole parents, and the compliance system interpreted to take account of these restrictions.
If the Government persists with this inequitable and unfair policy change, then additional urgent measures are essential.
Parents of children aged 6-15 with severe disabilities should be entitled to Carer Payment, which is currently not available until the child is 16. This is not mentioned in the Government’s policy.
There is no provision in the Newstart rules allowing recipients to undertake education. Instead, people in full-time education will have to apply for Austudy- a lower payment rate. Austudy should be modified so that sole parents and people with disabilities can study part-time. The pensioner concession card, pharmaceutical allowance and the pensioner education supplement should be extended to those who will now be on Austudy. With disability related costs being independent of allowance or income, disability supports should be de-linked from income supports.
If labour force activities are required of sole parents or of people with disabilities, then the system must accommodate the needs of those faced with a multiple barriers. There are those with both parental and caring responsibilities (such as for aged parents). There are many parents who also have a disability themselves. It is unfair to force people in these circumstances to look for work.
Marie Coleman 0414 483 067 Julia Perry 0418 404 201 www.nfaw.org
The National Foundation for Australian Women commissioned the National Centre for Economic and Social Modelling (NATSEM) at the University of Canberra to model the impacts of the Government’s Policy on people with a disability. Women With Disabilities Australia has supported the NFAW in this project. Figures used in this media release are drawn from the NATSEM Report issued today (13/09/05)