“Instead of spending their energy looking for a job these people are worried all the time by the very basics of survival.” Photo: Kate Geraghty
One in four people on the dole for more than a year in inner Sydney have been forced to beg on the streets, and six in 10 have approached a charity for help, says a grim new academic study into life on unemployment benefits.
The scale of deprivation for those on the Newstart allowance was so serious the researchers concluded the employment prospects of recipients had been seriously “scarred”.
“Instead of spending their energy looking for a job these people are worried all the time by the very basics of survival,” said the co-author, Dr Alan Morris from the University of Technology Sydney.
The survey of people on Newstart found most had gone without basics such as heating and good-quality food. About 80 per cent could not afford dental care, half could not buy new clothes and more than 40 per cent could not afford medicines.
“I was surprised by the level of desperation,” Dr Morris said. “The way some people are living is quite incredible. If they don’t escape quickly there is a terrible spiral of decline, and a major risk of becoming permanently stuck.”
Co-author Dr Shaun Wilson, from Macquarie University, said it was typical for longer-term recipients of Newstart to become very isolated and financially vulnerable.
“People don’t just lose dignity and connection with the world, they start to rely on increasingly risky and haphazard strategies for survival,” he said.
The survey found 25 per cent of long-term Newstart recipients had approached ”people on the street”.
Australia’s unemployment benefit is meagre compared to many comparable nations members of the Organisation for Economic Co-operation and Development, especially for singles in the initial stages of unemployment.
The Newstart payment for a single person is equivalent to just 28 per cent of the average wage, compared with an OECD median of 57 per cent in the initial stage of unemployment, the study says. The standard Newstart for a single person is $255.25 a week.
“We’re pretty much the worst of all the rich countries at supporting single unemployed people,” Dr Wilson said.
But tough new rules in the budget will make it even more difficult for unemployed young people. From the beginning of next year, under-30s who go onto Newstart will receive no payments at all for six months of each year.
Dr Morris said the changes threatened to undermine social cohesion and would contribute to the creation of a desperate underclass.
“I think these changes are going to unleash terrible suffering,” he said. “We are going to have more people begging in the streets.”
Housing is a major stress and Morris and Wilson found many recipients were living in “inadequate and even unsafe situations” because of a lack of affordable accommodation.
About a third of respondents lived in shared housing, boarding houses or pubs. One was living in a backpacker hostel while another had no electricity, no fridge and no hot water.
A lack of money forced many of those surveyed into unhealthy lifestyles.
“For some, their lack of disposable income had severe health implications,” the study found.
Most respondents said their social activity had been severely curtailed.
Many were troubled by depression and anxiety, and acute social isolation was common.
“For single people on Newstart, it was difficult to envisage having an intimate relationship. Often, accommodation was too sparse and respondents simply did not have the money to ‘date’.”
Their paper, Struggling on the Newstart unemployment benefit in Australia: The experience of a neo-liberal form of employment assistance, will be published in The Economic and Labour Relations Review.