Welfare Review: The Experts Respond

2 March 2015

In 2013 the federal government commissioned a review of Australia?s current welfare system. The review – titled A New System for Better Employment and Social Outcomes – was conducted by an independent reference group and has now been released.

Welfare Review: The Experts Respond

What does the welfare review recommend?

In short, the review recommends a vastly simpler welfare payment structure, condensing the approximately 20 different income support payments and 55 supplementary payments into just five broad payments. These would be the:

Tiered Working Age Payment

The tiered working age payment would be a means-tested payment for adults who are temporarily out of the work force, either due to unemployment or disability. The payment would have three different tiers to reflect the capacity of the recipient to engage in work.

“Capacity to work” takes into account the level of any disability, the age of dependent children and partnership status.

Supported Living Pension

The Supported Living Pension is a means tested pension for people over 22 who are severely restricted in their capacity to work in the open labour market due to disability and are expected to be restricted in this way for at least the next five years.

Child and Youth Payment

Child and Youth PaymentSimilarly to the current family benefit, the Child and Youth Payment would be a means tested payment paid to parents or guardians of dependent children and dependent young people. Interestingly, the report extends this to people aged up to 22 years.

To quote the report: “It should be paid per child and increase with the age of the child to better reflect the increasing costs of children as they grow up. It should be conditional on the child or young person having up to date immunisations and being in school, education, or training, where they have the capacity.”

Carer Payment

Similarly to the current situation, the Carer Payment would be a means tested payment for people over the age of 22 who are full-time carers for someone with a physical, intellectual or psychiatric disability or older people in need of care.

Age Pension

Age Pension

The Age Pension was outside the scope of the review, so continues as per the current arrangement.


Why have a welfare review?

In short, to develop a welfare system that encourages more people into the workforce.

The successive Intergenerational Reports have all warned of the ballooning cost of welfare and the fact that this cost will eventually become unsustainable, due partly to an ageing population. In his press release announcing the release of the McClure Review, Minister for Social Services, the Hon. Scott Morrison  observed that: ““Of the 10.1 million Australian income tax payers 8 million pay that tax so that we can fund the $150 billion welfare bill this country carries. If Australia keeps going this way, it will inevitably reach 10 out of 10 income tax payers.”

How have various groups responded to the Welfare Report?

How have various groups responded to the Welfare Report?

Below is a brief summary of the public responses to the Welfare Report from some community groups.

ACOSS saw the Welfare Report as a missed opportunity to rationalize payments according to financial need rather than decisions about ?deservedness’. While admitting that the report identifies key problems in the current payment system, ACOSS believes that some of the suggested solutions are flawed, with fears that some welfare recipients cold be worse off under the proposed model.

“We know that many stakeholders raised concerns about the adequacy of allowances and the increasing gap between pensions and allowances. We would have liked to have seen a stronger recommendation that payments to people who are unemployed need to be increased as an urgent priority,” said ACOSS CEO, Dr Cassandra Goldie.

UnitingCare expressed cautious support for the Welfare Report, while noting that it?s important to be realistic about the challenges to work and barriers to work faced by some people.

“For many people welfare can and should function as a short term safety net, helping them through a difficult period of life before they move back into engagement with the workforce,” said Lin Hatfield Dodds, National Director of UnitingCare Australia.

“The McClure report outlined the importance of ensuring payments are adequate now and in the future. It recommended changes that would lead to no one being worse off than they currently are. It is crucial that the Government pay particular attention to these recommendations.”

People with Disability Australia (PWDA) cautiously welcomed some key recommendations from the final report , but did express concern about how eligibility rules would be implemented.

The President of PWDA, Craig Wallace, also urged the Government not to ?cherry-pick? the report by adopting recommendations which relate to income support savings and ignoring those which relate to building a disability and mental health jobs plan.

“We are pleased by the call for a Jobs Plan for people with disability and mental health conditions.  This is something we have recommended for some time,” he said.


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