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

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Working age population welfare dependence continues to fall

Relatively low unemployment rates and the effect of a series of changes to eligibility for some payments has seen the proportion of the working age population receiving income support continue to decline, since peaking at over 25% in 1994. Read more...

The Pension Loans Scheme: an old program attracts new interest

The Australian Government’s Pension Loans Scheme (PLS) is a reverse mortgage scheme that allows people of pension age to access an income stream by borrowing against their housing equity. Currently it is only available people of pension age (or their partners) who are unable to receive a full pension because of the income or assets test. Amidst recent debates over the cost of aged care and the treatment of the family home in the pension assets test, two think tanks, the Australia Institute and Per Capita, have suggested expanding the scheme. How it works The PLS allows people to top up a part pension to the full rate or, for those not eligible for any pension, receive fortnightly pay... Read more...

New restrictions on disability pensioners travelling overseas

In the midst of heated debate over the Budget’s welfare reforms some significant measures have escaped the headlines, including new restrictions on Disability Support Pension (DSP) recipients travelling overseas. The measures, proposed by the Social Services and Other Legislation (2014 Budget Measures No. 2) Bill 2014, will reduce the time disability pensioners can spend overseas from six-weeks at a time to four weeks in a 12-month period. A number of submissions to the Senate committee inquiry into the Bill, from individual DSP recipients and from welfare groups, took issue with the changes suggesting that DSP was being unfairly targeted and that the measures would increase red tape. Read more...

Social services budget bills propose major changes to welfare

The 2014-15 federal budget included proposals for major changes in the social services portfolio, including payments to the unemployed, aged, people with disability and families with children. With most of these measures being introduced through two large and complex pieces of social services legislation, there is likely to be some confusion about the changes being made and which changes are being introduced where. This FlagPost provides a brief outline of what is in each of the social services bills. Most of the significant (and contentious) changes are introduced in the Social Services and Other Legislation Amendment (2014 Budget Measures No. 2) Bill 2014. This Bill includes proposals t... Read more...

Pension indexation: a brief history

In the lead-up to the Coalition Government’s first Budget, speculation has focused on possible changes to the age pension, including adjusting the way pension rates are indexed. Indexation is a complex and important component of the Australian social security system but one that is often misunderstood. The following provides an explanation and brief history of indexation. How pension rates are adjusted Currently, pensions (including the Age Pension, Service Pension, Disability Support Pension and Carer Payment) are indexed twice each year by the greater of the movement in the Consumer Price Index (CPI) or the Pensioner and Beneficiary Living Cost Index (PBLCI). They are then ‘b... Read more...

What’s happening with the McClure welfare review?

The Government is conducting a review into welfare payments, headed by former Mission Australia CEO, Patrick McClure. This post briefly outlines what is currently known about the McClure review, including its objectives, processes and possible outcomes. Late in 2013, it was reported that McClure had been asked to provide recommendations on streamlining and improving Australia’s system of welfare payments. While initially it was thought that the review would examine the entire system, the Government clarified that it would only be looking into working age payments such as Newstart Allowance (NSA) and the Disability Support Pension (DSP). Payments such as Age Pension and the various for... Read more...

Growth in Age Pension receipt: the elephant in the room of the welfare reform debate

The Minister for Social Services, Kevin Andrews, has recently expressed concern at the continued growth in the number of people in receipt of income support payments, and suggested that the welfare system is unsustainable. He has therefore commissioned Patrick McClure to undertake a review of the welfare system. Mr McClure’s previous review led to the Welfare to Work changes in 2006. However a closer investigation of the figures, released by the Department of Social Security, suggests that welfare receipt among those of working age is already declining, and hence the scope to make further large reductions may be limited. However Age Pension take up rates continue to increase. Read more...

Payments to support victims of overseas terrorism

Prime Minister Tony Abbott recently announced that victims of past overseas terrorist attacks would be entitled to an Australian Victim of Terrorism Overseas Payment (AVTOP), worth up to $75,000. The AVTOP was created in 2012 under the Gillard Government. Many of those affected by previous attacks have received some form of assistance from the Australian Government including coverage of medical costs and counselling/rehabilitation—the AVTOP provides a new formal mechanism for delivering monetary assistance. While there is strong community support for the scheme, a number of issues have been raised in regards to its design.How the payment works  The AVTOP is a one-off, lump-sum payment intend... Read more...

Future growth in DSP receipt—not all bad news

No doubt one of the priorities of the proposed review of income support payments will be the Disability Support Pension (DSP). DSP numbers have risen substantially in recent decades, despite numerous reforms designed to tighten eligibility and hence restrict growth. However a recent paper suggests that changes made to other income support payments have offset these reforms, and that the story is more positive than previous reports suggest.The factors behind DSP growthThe paper examines the factors behind the growth in DSP recipient numbers over the last 30 years, which rose from 216,600 in June 1982 to 827,500 in June 2012. Demography accounts for a significant amount, with an estimated 117,... Read more...

‘Grandfather’ arrangements for PPS – entitlement or inequity?

Since it was announced in the 2012-13 Budget that ‘grandfathering’ arrangements for single parents receiving Parenting Payment Single (PPS) would cease on 1 January 2013, there has been considerable concern expressed at the plight of these recipients who would see their weekly income support payments reduced by over $130 per fortnight for those on the maximum rate, and in some cases not be entitled to any income support and associated benefits if they had high enough earnings. However there appears to have been little recognition that these changes also mean that those who have been in receipt of PPS continuously since June 2006 are now being treated equally to the majority of single parents... Read more...