Abbott to crack down on dole but will avoid harshest recommendation

The Abbott government is set to make young people wait until they are 25.

The Abbott government is set to make young people wait until they are 25. Photo: Alex Ellinghausen

The Abbott government is set to make young people wait until they are 25 to receive the dole but will avoid the Commission of Audit’s most draconian recommendation to force unemployed people off benefits.

Young Australians are currently allowed to receive the Newstart unemployment allowance when they turn 22 but they are expected to be forced to wait until they turn 25 before receiving the payment in changes expected in the budget, when Prime Minister Tony Abbott will tell young Australians they must “learn or earn”.

Those who do not have a “track record” of working will find it harder to get on the dole.

In a significant change, the government is likely to force unemployed 22-year-olds to stay on the lower paying Youth Allowance. Another expected policy will be forcing school leavers to wait six months after graduating before applying for Youth Allowance.

The Abbott government would save millions of dollars every year by tightening the unemployment benefits eligibility. Single adults without children currently receive as much as $510 a fortnight on Newstart. But, under Youth Allowance, the maximum rate for a single person living away from home is $414.

While restricting welfare entitlements will be a central tenet of the May 13 budget, the Abbott government will not proceed with the harshest measure recommended by the National Commission of Audit.

The commission told the government that to save money it should require “young single people aged 22 to 30 without dependents” to relocate to suburbs with higher employment after spending 12 months on benefits.

Mr Abbott has long foreshadowed changes to the dole to push more young people off benefits and into work. The Coalition’s policy document states: “We believe that every Australian who is capable of working should be in a job, preferably for a wage but, if not, for the dole.”

As part of this, the Coalition is offering to pay a $2500 “job commitment bonus” to Australians aged between 18 and 30 who have been unemployed for twelve months, “if they get a job and remain off welfare for a continuous period of 12 months”.

Mr Abbott has promised an additional $4000 “bonus” if they stay in a job and off welfare for a continuous 24 months.

While the Coalition is not expected to force young unemployed Australians to relocate to areas with higher employment, the government is offering incentives to help them do so.

The Coalition will pay as much as $6000 to long-term unemployed people if they move to a regional area for a job, or $3000 if they move to a city.

This relocation assistance will only be available to people who have been on Newstart or Youth Allowance for longer than a year.