May 01, 2014
THE welfare system faces a major shake-up with young unemployed people forced to move for work or lose their Newstart allowance, alongside payment cuts for disability support pensioners, single mothers and carers.
The Commission of Audit wants a new rule to tackle youth unemployment that pushes young single people aged 22 to 30 without dependants or special exemptions to relocate to higher employment areas or lose access to benefits after a period of 12 months on the dole.
It also calls for increasing the income test withdrawal (taper) rate to 75 per cent for Newstart recipients and other related allowances.
The commission recommends radical changes to carers’ payments, including limiting the annual Carer Supplement to only one payment per carer and introducing an income test for the Carer Allowance, set at $150,000 per year.
In a radical departure from the current Carer Allowance rules, the Commission of Audit says the Abbott Government must review eligibility criteria applying to the type of care provided and to the needs of the adult receiving care.
“This should ensure that the Carer Payment is targeted to those whose caring responsibilities limit their capacity to work,” they argue.
And carers’ payments would be lowered by transitioning to a new benchmark of 28 per cent of average weekly earnings.
Disability support pensioners, meanwhile, who are currently “grandfathered” — which means they are not subject to strict means tests — would also face reassessment and stricter testing for the benefit.
The Disability Support Pension (DSP), like the carers’ payments, would also be gradually reduced by transitioning to a new benchmark of 28 per cent of average weekly earnings.
The Commission of Audit also wants new eligibility requirements for the DSP, including replacing the current income and assets tests with a single comprehensive means test; including the value of the principal residence above thresholds of $750,000 for coupled pensioners and $500,000 for single pensioners in the new means test; and increasing the income test withdrawal (taper) rate from 50 per cent to 75 per cent.
The commission argues that housing affordability and homelessness prevention are primarily the responsibility of state and territory governments, in a radical departure to the approach taken by the previous Gillard/Rudd Governments that established a national approach with the states to the issue.
The commission recommends the commonwealth limit its involvement in housing to providing Rent Assistance payments and extend Rent Assistance to public housing tenants, provided that state governments start charging market rates of rent.
It says the federal government could fund the increase in Rent Assistance payments by “redirecting commonwealth funding from existing agreements with the states for affordable housing and homelessness and the National Rental Affordability Scheme”.
And single mothers face hits to their payments, with a recommendation to establish a new benchmark for the Parenting Payment Single of 25 per cent of average weekly earnings, with transition occurring over a 15 year period during which indexation would be linked to movements in the consumer price index.
They have also called for those over sixty who are on working-age payments including Newstart, Widow and Sickness Allowance to receive payment cuts. People over sixty currently receive higher rates of assistance.
The changes would “make them consistent with those for other recipients,” the Commission of Audit says.