Carbon Pricing Mechanism—Assistance to welfare recipients

Posted 15/07/2011 by Luke Buckmaster

The Government has announced a package of measures aimed at providing assistance to households to compensate for the cost of living impact of the carbon price. Assistance will be delivered through permanent increases to welfare payments and tax cuts. The Parliamentary Library has published a short brief outlining the assistance provided to welfare recipients.

The brief notes that, according to the Government’s modelling, welfare recipients will be overcompensated for the expected cost of living impact of the carbon price. Indeed, it appears that welfare recipients will also effectively be compensated more than once when normal processes of payment indexation are taken into account. The brief also notes that pensioners receive more assistance than other welfare recipients (such as jobseekers) and that this essentially reflects the fact the current differences in rates of payment between different categories of welfare recipient.

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