Despite the GFC, income support reliance remains low

Parliament house flag post

Despite the GFC, income support reliance remains low

Posted 15/08/2012 by Carol Ey

The Senate Education, Employment and Workplace Relations Committee is currently holding two separate but related enquiries, one into the adequacy of the allowance payment system for jobseekers and others, and the other into legislation to remove the ‘grandfathering’ transitional arrangements for parenting payment recipients (among other changes).

In this context, it is timely to look at the impact of previous changes to the welfare system and consider what proportion of the working age population is affected by issues being considered by the Committee.

Despite the impact of the Global Financial Crisis (GFC), which led to a slight increase over the period to 2010, the level of income support reliance among the working age population is now at historically low levels, with the only other years at comparable levels since 1982 being 1989 and 1990.

The chart below shows the proportion of the population aged between 16 and 64 who were in receipt of an income support payment as at 30 June of the each year from 1978 to 2011.

Main categories of workforce age income support recipients as a proportion of the workforce age population, 1978 to 2011

As at June 2011, some 17.7 per cent of the working age population received some form of income support. The largest category are those on disability and sickness payments (mainly Disability Support Pension) at 5.6 per cent of the working age population, followed by unemployment benefits (4.2 per cent), students (2.6 per cent) and single parents (2.2 per cent). While some of these people also had income from other sources, for example part-time or casual work, their income support and other social security payments (such as Family Tax Benefit for those with children) are the major source of income for most.

Not surprisingly, the trends over time for both the total proportion and particularly the proportion on unemployment benefits reflect the economic environment, with peaks during the early 1980s, the early to mid 1990s and an upturn following the GFC in 2007.

However the impact of changes to the welfare system is also apparent, particularly in the decline of those on payments with low workforce attachment (for example, payments to widows, mature age allowance and payments to the partners of welfare recipients without dependent children). People receiving these payments do not have an obligation to look for work or engage in other activities such as education or caring. Changes introduced in the mid 1990s and the Welfare to Work initiatives in 2006 have meant that many of these payments are no longer open to new entrants, resulting in a reduction from 4.9 per cent of the working age population in 1995 to less than 1 per cent in 2011.

The Welfare to Work changes also had an impact on the proportion receiving parenting payments, declining from a peak of nearly 5 per cent during the late 1990s and early 2000s to 3 per cent in 2011. The changes being proposed by the Government, and which are the subject of the Senate Committee inquiry, to apply the new criteria to those who were on payment before 1 July 2006 are estimated to shift some 72 900 people currently receiving parenting payments on to unemployment benefits from 1 January 2013, which will mean a reduction of a further 0.5 per cent of the workforce age population on parenting payments and a corresponding increase in those on unemployment payments.

Interestingly the proportion of the population receiving disability payments has continued to rise steadily despite repeated attempts by governments to reduce access to these payments. While in earlier years this increase was largely offset by a decline in those receiving veterans’ payments, more recently disability and carer payments were the only areas that did not decline during the periods of very low unemployment in the early to mid 2000s.

Since the introduction of a carer’s pension in December 1983, payments to carers has been the fastest growing area of working age income support, with the proportion of the population receiving payment for caring doubling from 2004 to 2011.

The payment rates vary across each of these categories, with those receiving disability, veteran or carer payments being paid at the pension rate of payment, which is $695.30 per fortnight (pf) for singles and $524.10 for a member of a couple. The main unemployment payment, Newstart Allowance, is $489.70 pf for single people without dependents, $529.80 pf for single people with dependent children, and $442.00 for members of a couple, and student payments are also around this level. Parenting Payment Single is at a rate between these two categories, at $648.50 pf.

In total, over 42 per cent of income support recipients of working age are receiving payments at the pension rate, some 27 per cent at the Newstart Allowance rate, 18 per cent at the student rate and over 12 per cent at the rate for single parents. Hence an increase in the rate for Newstart Allowance would benefit some 5 per cent of the working age population, with this rising to nearly 8 per cent if this increase also flowed through to student payments.

Thank you for your comment. If it does not require moderation, it will appear shortly.
Facebook LinkedIn Twitter Add | Email Print


Flagpost is a blog on current issues of interest to members of the Australian Parliament

Parliamentary Library Logo showing Information Analysis & Advice




refugees asylum immigration Parliament Australian foreign policy elections climate change social security women welfare reform taxation Indigenous Australians Australian Defence Force welfare policy school education higher education private health insurance health financing emissions trading Senate Australian Bureau of Statistics employment people trafficking Asia statistics Middle East illicit drugs gambling health reform federal election 2010 income management Medicare disability Sport United Nations industrial relations constitution transport Australian Public Service politics criminal law Afghanistan health forced labour environment aged care aid Australian Sports Anti-Doping Agency World Anti-Doping Agency United States federal budget Carbon Pricing Mechanism dental health regulation food Fair Work Act voting law enforcement electoral reform public service reform OECD Australian Electoral Commission WADA child protection poker machines Australia in the Asian Century steroids National Disability Insurance Scheme detention 43rd Parliament slavery health system domestic violence parliamentary procedure International Women's Day accountability defence capability multiculturalism ASADA Australian Federal Police governance labour force people smuggling debt international relations New Zealand Australian Crime Commission pharmaceutical benefits scheme Human rights crime China leadership Census election results UK Parliament Papua New Guinea banking corruption pensions children's health Aviation federal election 2013 foreign debt gross debt net debt Senators and Members ALP Newstart Parenting Payment Youth Allowance sea farers Australian economy violence against women vocational education and training military history by-election political parties High Court skilled migration mental health Federal Court terrorist groups science social media Higher Education Loan Program HECS federal state relations youth paid parental leave same sex relationships coal seam gas customs planning doping health risks Gonski Review of Funding for Schooling sex slavery Special Rapporteur Northern Territory Emergency Response social policy Rural and regional trade unions Foreign affairs election timetable Indigenous royal commission Productivity United Kingdom firearms public policy Population ADRV terrorism transparency research and development welfare ASIO intelligence community Australian Security Intelligence Organisation carbon tax mining employer employee renewable energy regional unemployment fishing European Union family assistance United Nations Security Council forestry food labelling Drugs welfare systems Indonesia children Constitutional reform local government codes of conduct terrorist financing homelessness Parliamentary remuneration money laundering Trafficking in Persons Report energy social inclusion paternalism nutrition ODA Defence sitting days electoral divisions Southeast Asia administrative law universities TAFE Ireland citizenship asylum seekers early childhood education Canada Financial sector national security fuel disability employment Tasmania integrity standards NATO Australian Secret Intelligence Service sexual abuse World Trade Organization Australia public health housing affordability bulk billing water health policy Governor-General US economy export liquefied natural gas foreign bribery question time speaker superannuation public housing expertise climate Intergovernmental Panel on Climate Change Department of Agriculture Fisheries and Forestry Pacific Islands reserved seats new psychoactive substances synthetic drugs UNODC carbon markets animal health middle class welfare constitutional recognition of local government referendum consumer laws PISA competition policy US politics language education baby bonus Leaders of the Opposition citizen engagement policymaking Australia Greens servitude Trafficking Protocol forced marriage alcohol entitlements ministries Hung Parliament social citizenship maritime Iran ANZUS regional students school chaplains federal budget 2011-12 salary Medicare Locals primary care Building the Education Revolution marine pollution sustainability prisons police deaths in custody electoral margins electoral pendulum electoral redistribution redistribution NSW redistribution WA redistribution ACT electoral boundaries ASEAN Sustainable Development Goals Double dissolution Senators safety vehicles MYEFO Pathology tertiary education Taiwan Xi Ma meeting family violence government financial advisers financial planners Financial System Inquiry Murray Inquiry China; Economic policy; Southeast Asia; Africa housing Speaker; House of Representatives; Parliament High Court; Indigenous; Indigenous Australians; Native Title ACT Indigenous education Norfolk Island External Territories emissions reduction fund; climate change child care funding refugees immigration asylum procurement Indigenous health e-voting internet voting nsw state elections 44th Parliament 2015 ABS Age Pension Death penalty capital punishment execution Bali nine Bali bombings Trade EU China soft power education Fiji India Disability Support Pension Antarctica Diplomacy by-elections state and territories Bills anti-corruption fraud bribery corporate ownership whistleblower G20 economic reform innovation Members of Parliament Scottish referendum Middle East; national security; terrorism social services Criminal Code Amendment (Misrepresentation of Age to a Minor) Bill 2013 online grooming sexual assault of minors ACT Assembly smoking plain packaging tobacco cigarettes Asia; Japan; international relations Work Health and Safety Migration; asylum seekers; regional processing China; United States; international relations fiscal policy Racial Discrimination Act; social policy; human rights; indigenous Australians Foreign policy Israel Palestine asylum refugees immigration political finance donations foreign aid Economics efficiency human rights; Racial Discrimination Act employment law bullying Animal law; food copyright Australian Law Reform Commission industry peace keeping contracts workplace policies same-sex marriage disorderly conduct retirement Parliament House standing orders prime ministers First speech defence budget submarines workers Somalia GDP world heritage political engagement leave loading Trade; tariffs; safeguards; Anti-dumping public interest disclosure whistleblowing Productivity Commission limitation period cancer gene patents genetic testing suspension of standing and sessional orders live exports infant mortality honorary citizen railways disciplinary tribunals standard of proof World Health Organisation arts international students skilled graduate visas temporary employment visas apologies roads Italy national heritage NHMRC anti-dumping Rent Assistance obesity evidence law sacrament of confession US presidential election international days DFAT UN General Assembly deregulation Regulation Impact Statements small business Breaker Morant regional engagement social determinants of health abortion Members suspension workplace health and safety marine reserves hearing Victoria astronomy resources sector YMCA youth parliament Korea rebate Australian Greens presidential nomination Racial Discrimination Act political parties preselection solar hot water Financial Action Taskforce Horn of Africa peacekeeping piracy Great Barrier Reef Stronger futures political financing political education Social Inclusion Board early childhood National Quality Framework for Early Childhood Education and Care Murray-Darling Basin sanctions Norway hospitals republic President Barack Obama Presidential visits qantas counselling Korean peninsula Work Choices biosecurity hendra environmental law federalism federation preselection therapeutic goods Therapeutic Goods Administration plebiscites computer games pests suicide nuclear COAG Ministerial Councils floods ADHD stimulant medication advertising electricity extradition conscience votes poverty preventative health rural health coastal erosion Parliamentary Budget Office work-life balance

Show all
Show less
Back to top