E-Brief: Online Only issued September 2000
Analysis and Policy
Social Policy Group
What is in this e-brief
This e-brief aims to provide background information on the
Welfare Review announced in September 1999 and to provide links to
relevant documents and sites on the Internet. As part of this
background it includes an outline of changes to welfare since 1996
and also a brief history of welfare reviews conducted in
Governments welfare review announced
On 29 September 1999, the Minister for Family and Community
Services Senator the Hon. Jocelyn Newman announced, at an address
to the National Press Club, the government's
intention to conduct a welfare review.
In announcing the review, the government outlined a set of
welfare principles which should be the aim of reform. They
- Maintain equity, simplicity, transparency and
- Establish better incentives for people receiving social
security payments, so that work, education and training are
- Create greater opportunities for people to increase
self-reliance and capacity-building, rather than merely providing a
passive safety net;
- Expect people on income support to help themselves and
contribute to society through increased social and economic
participation in a framework of Mutual Obligation;
- Provide choices and support for individuals and families with
more tailored assistance that focuses on prevention and early
intervention; and finally;
- Maintain the Government's disciplined approach to fiscal
Issues and problems for the Welfare
The Minister's comments on specific issues and problems
- Some parts of the welfare system still create work and saving
- More can be done to emphasise individual responsibility.
- The system does too little to prevent the problems resulting in
people needing to go on payments.
- More needs to be done to help people improve their capacity to
move off payments.
- The number of children in workless families is disturbingly
- We are starting to see the transfer of welfare dependency
- There are examples around Australia where, notwithstanding that
there are job vacancies, certain members of the community are not
only prepared, but feel entitled to exploit the social safety
- The labour market marginalisation of older unemployed and
people with disabilities are issues needing to be addressed.
- The increasing dependence of both sole-parent and low-income
dual parent families on parenting allowance, rather than
self-provision through employment is a matter of concern.
Welfare Review timetable
The high-level Reference Group was established on 29 September
1999 and it presented an interim findings report in early 2000. The
Reference Group provided a final Green Paper to the Minister on 17
August 2000. The Green Paper is to form the basis of a
comprehensive welfare reform submission to be presented to Cabinet
before the end of 2000.
Welfare Reform Internet site
The government has established a
Welfare Review information site within the general Department
of Family and Community Services home page.
Information available on the Welfare Reform Internet site
Composition of the high-level Reference
The high-level Reference Group formed to put together the Green
Paper on Welfare Reform is
- Mr Patrick McClure (Chair), Chief Executive Officer - Mission
- Mr Wayne Jackson (Deputy Chair), Deputy Secretary - Department
of Family and Community Services
- Professor Peter Dawkins, Melbourne Institute of Applied
Economic and Social Research - Melbourne University
- Professor Mark Lyons, Social Economic Management School -
Sydney University of Technology
- Ms Jane Schwager, Chief Executive Officer - Benevolent Society
of New South Wales
- Mr Jim Longley, Chief Executive Officer - Anglican Retirement
- Ms Elizabeth Morgan, Social Policy Specialist - Morgan, Disney
Key submissions to the Welfare Review
Advertisements calling for public submissions were placed in the
press in October 1999. Three hundred and sixty six were received. A
list of public submissions, many available electronically, is
here. Submissions included:
Interim findings report - early in 2000
interim report of the Reference Group for Welfare Reform was
released in March 2000.
The interim report flagged several key aims and elements, which
should be addressed in any welfare reform. These areas are:
- Individualised service delivery
- A simpler income support structure more responsive to
- Incentives and targeted assistance to encourage and enable work
- Social partnerships between government, businesses and
- Mutual obligations consistent with community values and
Responses to the Interim Report
- Australian Council of Social Service (ACOSS)
Comments and statements by Political
The Australian Labor Party
The Australian Democrats
Feature media articles and comments
The onset of welfare reform: bouquets and brickbats, Benjamin
Haslem, Australian, 29 May 2000
Not much safety in the net,
Patrick McClure, Australian, 29 March 2000
Reform begins with basic rates, Michael Raper, Australian, 30
- The Sydney Morning Herald website has a special page, Working
on welfare, with links to related articles, 30 March 2000
Green Paper (McClure Report) released 16 August
The Expert Reference Group Green Paper, the
McClure Report was released on 16 August
Welfare changes by the current government since March
Since coming to office in 1996, the Government has undertaken a
considerable number of changes to existing income support and
supplement programs. However, the majority of these changes have
been relatively small. There have, however, been a couple of
substantial rationalisations of program arrangements for specific
sectors and these are outlined below.
Reforms to assistance for the unemployed
Youth Allowance (YA) was introduced from July 1998 and featured
the rationalisation of income support arrangements for the young
unemployed and students. The pre-existing AUSTUDY, Youth Training
Allowance and Newstart Allowance programs for young people were
rolled into the one YA program.
General eligibility and payability information about YA is
The Job Network
Network was introduced from May 1998. It featured a complete
change to the employment placement assistance arrangements for the
unemployed and replaced the arrangements that had been in existence
under the previous government's Working Nation arrangements.
General information about the Job Network is available here.
Mutual Obligation and Work for the Dole
One of the major new welfare initiatives for jobseekers
introduced by the current government has been the development of
Mutual Obligation (MO), featuring the Work for the Dole Program
Mutual Obligation is based on the proposition that unemployed
job seekers supported financially by the community should:
- actively seek work
- constantly strive to improve their competitiveness in the
- give something back to the community that supports them
The objective of Mutual Obligation is to encourage greater
self-reliance and motivation in job seekers by encouraging them to
take responsibility for and to be more focussed on, their job
search and preparing for work activities.
Job seekers are required to take part in a Mutual Obligation
activity if they are:
- 18 - 24 years old and have been getting Newstart or Youth
Allowance for six months; or
- 25 - 34 years old and have been getting Newstart Allowance for
WFTD is a Commonwealth Government funded programme that provides
work experience opportunities and activities for eligible job
seekers. WFTD Dole enables some unemployed people to satisfy their
mutual obligation requirement to give something to the community in
return for their unemployment payments.
Reforms to assistance for families
As a part of the compensation to low-income families for the
introduction of the 10% Goods and Services Tax (GST), reforms to
family assistance were introduced from 1 July 2000.
The new family assistance arrangements rationalised the
low-income family assistance and tax transfers previously provided
under both the social security and tax systems. Features of the new
- Family Tax Benefit - Part A provides age and income related
payments for each dependent child in families with incomes up to
about $77,000 per annum (for one child)
- Family Tax Benefit - Part B provides a supplement, paid in
addition to FTB-A, for single income families
- Child-Care Benefit amalgamates the previous Child-Care Cash
Rebate and the Child-Care Fee Relief and will provide income tested
fee subsidies for those using a range of child-care services.
- Maternity Allowance and Maternity Immunisation Allowance
provides lump sum payments to parents after the birth and
immunisation of each child for those who pass the Family Tax
Benefit income test.
For general information about the new family assistance
arrangements, see the Payments for Families section on the Family Assistance Office
reviews and reforms - history
There have only been a few occasions in the history of welfare
provision in Australia when full-scale reviews have been followed
by comprehensive reforms. Most of the changes to welfare programs
and systems have occurred on an ad-hoc and incremental basis.
Generally, welfare programs have evolved over time and have been
replaced as successive governments have perceived different needs.
The rarity of major reviews is somewhat surprising, given the
longevity of the major programs: the old age and invalid pensions
originating in 1908 and the unemployment and sickness benefit
payments in 1944.
Much examination of welfare programs in the 1920s and
the 1930s but very little development
While no substantive changes were made to the old age and
invalid pensions of 1908 during the 1920s to the 1930s, there was
considerable examination of the need for new payments during the
period. It was not until later, when the Commonwealth gained access
to revenue sources, especially income taxation, that it acquired
the financial capacity to implement new welfare programs. Some of
the highlights of the considerations undertaken in the 1920s and
- In 1913 the Cook government considered contribution-based
- In 1927 the Bruce-Page government established a Royal
Commission to consider a child endowment.
- In 1928 and also in 1938 legislation was introduced for some
form of national insurance scheme, but in both cases nothing came
- In 1937-38 considerations and inquiries into a national
insurance scheme for the unemployed.
1941 to 1946 - establishment of a national government
provided social security system
The Menzies government introduced child endowment in 1941. The
Chifley and Curtin governments added payments for unemployment,
sickness benefits and also widows pensions from 1944.
Broadly, these new payments had their origins in the mass
unemployment of the 1920s and 1930s. In the 1940s, there was a
broad, nationally expressed desire for 'social security': a 'new
order' to address the concerns arising from the lack of proper
provision for those adversely affected by the mass unemployment of
the 1920s/30s. The establishment of the Joint Parliamentary
Committee on Social Security in 1941, which, remained in existence
until the end of the seventeenth Parliament in 1946, reflected this
concern. While not all of the new national social security programs
of this period had their origins in the Committee, it provided a
focus and forum for the expression of concerns, views, new ideas
and also an impetus for new initiatives.
The 1950s to the 1970s – consolidation and
During the 1950s to the 1960s, there was very little substantive
change to the welfare system or to programs. This period of
stability was largely the result of a period of full-employment.
Social change and increased unemployment stimulated a renewed look
at income support from the mid 1970's.
1980s – the Social Security Review commences from
The Social Security Review was established in February 1986 by
the then Minister for Social Security, the Hon. Brian Howe, MP. The
Review was funded for two years and was commissioned to develop a
long-term perspective on priorities and, where needed, new
directions for income security, focussing on three main areas:
- income support for families with children
- social security and workforce issues
- income support for the aged
Review processes broadly followed the following steps
- examination of the features and elements of current programs
- publication of discussion papers
- community consultations
- formulation of new policies, goals and programs
- development of change proposals to and approval by
- where required, approval of any necessary legislation and/or
regulation by the Parliament
- development and introduction of new or revised programs
The Social Security Review covered all major aspects of social
security policy and examined issues of equity, adequacy,
simplicity, access, redistribution and transition to work. Six
major issues papers were put forward and formed the basis for
community consultations. A further 31 Research and Discussion
papers were produced.
By late 1988 completed most of the Review's work had been
completed and by the end of 1991 significant policy changes had
been made across all the major programs examined.
1986 Social Security Review – what was the
The Social Security Review led to substantive restructuring of
the social security system, including the introduction of several
new income support programs. Given the lead-time involved with any
examination and development of welfare programs, many of the
changes arising from the Review took several years.
Apart from the instigation of new programs, the Social Security
Review had some broader and long-term direct and indirect impacts
on social security and welfare delivery. Some of these were:
- An increased awareness and emphasis on active elements within
income support programs, mainly in terms of linking receipt of
assistance to access to work assistance measures like training and
job placement assistance, eg. Jobs, Education and Training (JET)
for sole parents.
- The need for guaranteed indexation of payments to cost of
living increases. Virtually all payments are now indexed to the
- On-going monitoring and evaluation of all payments to ensure
proper targeting and delivery according to design and policy
requirements. Evaluation of program outcomes has become the norm,
especially in the context of program and policy evaluation and
development. In 1988 the then government introduced a requirement
that each program be subject to a major evaluation every three or
1986 Social Security Review – new programs and
changes to programs
The Social Security Review established a culture of and an
acceptance of change. Modifications to programs were aimed at
targeting and providing positive incentives to encourage work and
reduce welfare dependence, especially long-term dependence. This
was a significant shift from the proceeding years, when most of the
main income support programs were not reviewed and remained
unchanged. The starkest examples of this was the invalid pension
program, which had been in existence since 1908, yet had remained
largely unchanged until replaced by Disability Support Pension in
Many of the changes to existing programs and new programs
initiated from the mid-1980s to the mid-1990s can claim to have
their origins wholly or partially in the Social Security Review.
Some of the more significant changes that arose from the Social
Security Review are set out below.
Retired age assistance
The raising of the qualification age for women to access the age
pension from 60 to 65, to take over 20 years, commencing from 1994.
This acknowledged one of the consistent findings of the Social
Security Review, that there was no longer any justification for
gender based eligibility conditions for payments.
This raising of the qualification age for women had parallels
with the cessation of access to the Widow B pension that commenced
from July 1987.
A series of measures were introduced signifying a shift from
passive to active assistance. Active assistance placed a far
greater emphasis on work search efforts and requirements
- compulsory registration with the Commonwealth Employment
- compulsory personal lodgement of fortnightly income and work
search effort forms
- work intention questionnaires
- compulsory interviews after 12 months receipt of payment
- job departure certificates detailing reason/s for loss of
Job search allowance replaced the unemployment benefit for 16-17
year olds, signifying a greater emphasis on education retention and
work search efforts and requirements.
The introduction of widowed person's allowance, for newly
widowed people of either sex, partially removing the sex
differentiation that had previously applied for widow's B
The introduction of the Newstart allowance (replacing the
unemployment benefit) for those unemployed for 12 months or more, a
program which featured:
- intensive interviews
- referral to training and labour market programs
- tougher work search effort requirements
Income support for the unemployed was re-structured to
- Jobsearch allowance for 16-17 year olds was extended to all
those unemployed for up to 12 months; and
- Newstart allowance was paid to unemployed aged 18 or more and
unemployed for 12 months or more.
The income test free area for Jobsearch and Newstart allowance
was raised from $30 to $50 per fortnight to encourage increased
A $200 education entry payment was introduced for the unemployed
aged 16-17 and those unemployed for 12 months or more.
The Earnings Credit Scheme of up to $500 was introduced, to
encourage increased employment participation.
Partner allowance was introduced for the unemployed partner of a
Newstart allowance recipient, replacing the dependent partner
allowance, as a move towards full independent payments for female
Introduction of mature age allowance for older long-term
unemployed with no recent attachment to the workforce and little
prospect of re-attachment. It was payable to males between 60 and
64 (ie. below the aged pension age) and those unemployed for 12
months or more. Recipients were not required to look for
Disabled and the sick
The Disability Reform Package was introduced which featured:
- The replacement of the invalid pension with the disability
support pension, entailing new qualification criteria placing more
emphasis on work capacity rather than impairment or
- Sickness benefit replaced by the sickness allowance with a
2-year cap on payment duration, confining the payment to those
temporarily incapacitated for work.
- Specific funding for training and rehabilitation programs for
those on the disability support pension and the sickness allowance,
to encourage employment participation and the maximising of
self-support from employment.
Commencing from 1991, a series of incremental enhancements and
expansion of access to the carer pension and carer assistance
Dual eligibility to the pension and education assistance ceased
and sole parent pensioners were eligible for the pensioner
The maximum qualifying age for a dependent child was lowered
from age 24 to 15.
Earnings Credit Scheme of up to $1,000 was introduced to
encourage increased employment participation.
Fringe benefits were maintained for 3 months after income earned
had exceeded the fringe benefit income test cut-off point,
encouraging increased and continued employment participation.
The introduction of the Jobs, Education and Training (JET)
- funding for work assistance and educational programs
- assistance with and referral to child care
- education supplement for those undertaking study
JET was later expanded to widow pensioners, partner allowees and
Assistance for families with children
The introduction of the Family Allowance Supplement (FAS) from
December 1987 replaced the Family Income Supplement (FIS). FAS, a
non-taxable payment, featured far higher rates of payment and more
generous means testing arrangements than FIS, so as to
significantly expand access to low-income families. At the time it
was the biggest single dollar increase ever made to child
FAS was paid in addition to Family Allowance (FA), commonly
referred to as the child endowment. FAS later absorbed the
additional pension and benefit components, paid in respect of
children had its evolution saw several name changes. These names
included additional family payment and additional family
With the introduction of the current government's new family
assistance arrangements, introduced from 1 July 2000, this payment
is now paid in the form of the Family Tax Benefit Part-A.
The introduction of FAS in 1987 also featured the expansion of
access to rent assistance (RA) for low-income working families
paying private rent. Previously, only low-income families on a
government income support payment (ie. pension or benefit), were
able to access RA.
From November 1987, the Child Disability Allowance (CDA)
replaced the Handicapped Child Allowance, featuring no income
testing and the discontinued distinction between 'substantially'
and 'severely handicapped'.
From December 1988, all child-related payments were paid
fortnightly as a single payment (not monthly as applied to some
payments previously). The main child related payments then included
were the basic family allowance, FAS, CDA, double orphan pension
and multiple birth payments.
An assets test for FAS and income testing based on annual
taxable income was also introduced.
Home Child Care Allowance (HCCA) was introduced and largely
replaced the dependent spouse tax rebate for those with
HCCA was paid fortnightly to the partner at home caring for the
child, rather than as a lump sum tax return to the income earner at
the end of the year or a fortnightly deduction in wages. HCCA was
subsequently re-named the basic parenting payment.
Descriptions of the evolution and development of
welfare programs in Australia
Several Parliamentary Library papers provide a more detailed
history and chronology of the development of welfare assistance
programs to specific groups. The papers are:
For copyright reasons some linked items are only
available to Members of Parliament.
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