Social security payments for the unemployed, the sick and those in special circumstances, 1942 to 2012: a chronology

4 December 2012

PDF version [725KB]

Carol Ey
Social Policy Section

Contents

Introduction

A brief history of unemployment and sickness benefits in Australia

The context for the introduction of benefits: from Federation to 1945
Early responses to unemployment growth: 1945 to 1988
The active employment strategy: 1988 to 1993
Working Nation: 1994 to 1996
Mutual Obligation commenced: 1997
Youth Allowance introduced: 1998
Welfare to Work reforms: 2006
Detailed information

A brief history of payments for widows in Australia

The introduction of Widow Pensions: 1942 to 1947
The end of Widow Pensions: 1987 to 2006
Detailed information

A brief history of assistance with rent: 1958 to 2012

Detailed information

Note on sources and further reading

Appendix A: Trends in recipient numbers

Numbers of recipients of payments for the unemployed, the sick and those in special circumstances, from 1943

Appendix B: Chronology of payments to the unemployed

Unemployment Benefit, 1945 to 1991, Job Search Allowance, 1988 to 1991
Newstart Allowance from 1991, Job Search Allowance 1991 to 1996
Youth Allowance from 1998
Sickness Benefit, 1945 to 1991, Sickness Allowance from 1991
Special Benefit from 1945
Mature Age Allowance from 1994 to 2008, Mature Age Partner Allowance 1994 to 1995
Partner Allowance from 1994
Maximum rates of Unemployment Benefit, Job Search Allowance, Newstart Allowance, Sickness Benefit, Sickness Allowance, Youth Training Allowance, Youth Allowance, Special Benefit(a), Mature Age Allowance, Partner Allowance and Widow Allowance, from 1945
Income and asset limits for Unemployment Benefit, Job Search Allowance, Newstart Allowance, Sickness Benefit, Sickness Allowance, Youth Training Allowance, Youth Allowance, Mature Age Allowance and Widow Allowance, from 1945
Liquid assets test for Newstart Allowance and Youth Allowance, from 1991

Appendix C: Chronology of payments to widows

Widow B Pension from 1942, Widow D Pension from 1947 to 1960
Widow C Pension, 1942 to 1989, Widowed Person Allowance, 1989 to 1995, Bereavement Allowance from 1995
Widow Allowance from 1995
Maximum rates of widows pensions, from 1942
Income and assets limits for Widow B Pension, from 1942

Appendix D: Chronology of assistance with rent

Supplementary Allowance/Assistance 1970 to 1985, Rent Assistance from 1985
Maximum rates of Supplementary Allowance/Rent Assistance, from 1970

List of Acronyms

 

Acknowledgments:

This paper updates work undertaken by previous researchers in the Library, particularly Dale Daniels. The author is also very grateful to Marilyn Harrington for her considerable efforts in editing the paper.

Introduction

This chronology is one of several produced by the Parliamentary Library dealing with the history of social security payments. Other titles in the series are:

A further chronology on social security payments for students and apprentices is in development.

The Department of Education, Employment and Workplace Relations (DEEWR), the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA), the Department of Industry, Innovation, Science, Research and Tertiary Education (DIISRTE) and their predecessor agencies (including the Department of Social Security (DSS)) administer, or have administered in the past, a number of payments for able-bodied work force aged people. Responsibility for delivery of the payments now rests with the Department of Human Services (DHS) (previously Centrelink). This paper provides a short history of the development of these payments and a chronology of changes to each payment from their introduction to the present day. Trends in the number of recipients of these payments can be found in Appendix A.

The paper is not a definitive treatment of the history of social security in Australia. It is a reference tool for those needing to locate specific changes quickly and place them in their chronological context. It also does not provide information on the availability of, and eligibility for, social security benefits. For this information see the DHS website[1]

The date from which measures have taken effect has been used to mark changes, not the date the legislation was passed. Many changes that appear at the time of updating to be of minor importance and small administrative modifications to payments have not been included.

Rates of payment are generally not given in the chronology text in the appendices, but can be found in the accompanying tables. In the text, imperial currency is used for payments prior to 1966 and decimal currency is used from that date, reflecting the legislation and commentary at the time. In the tables decimal currency is used throughout for comparison purposes.

Payments for sole parents (including those for widows with dependent children) are included in the chronology dealing with payments for people caring for children. Payments for widowed people are included in this document, but payments for students are generally not included, except where these relate to Youth Allowance which also applies to young people who are unemployed and looking for work.

A brief history of unemployment and sickness benefits in Australia

The context for the introduction of benefits: from Federation to 1945

Prior to the Depression of the 1930s the only assistance for unemployed people was provided by charitable bodies, with assistance from state governments consisting of food relief funded at ministerial discretion. Government public works programs were the other main source of help for the unemployed. The shortcomings of these measures became apparent during the Depression. They were poorly administered, unable to cope with the numbers involved, destructive of the dignity of those needing assistance and extremely parsimonious.

The Depression experience ensured a favourable reception when in 1943 the Curtin Government announced its decision to introduce unemployment, sickness and special benefits. Contributory unemployment insurance schemes had been developed in the United Kingdom (UK) in the 1920s and in the United States of America (USA) in the late 1930s. In Australia, the insurance approach was considered several times; and in 1938 the National Health and Pensions Insurance Bill was passed following extended debate. This was in part due to opposition from the medical profession to the inclusion of medical insurance but also due to disagreement about the method by which social services should be funded. Implementation of the scheme, which provided cash benefits during sickness and for disablement, old age and widows and orphans, was postponed due to increased emphasis on defence following the Munich crisis. While the Menzies Government approved the preparation of legislation extending the scheme to cover unemployment insurance, this was not proceeded with due to Australia’s entry into war with Germany. The scheme had not been implemented by the time the Curtin Government came to power in October 1941, at which time it was effectively abandoned as Labour opposed the contributory approach.[2]

Legislation introducing a flat rate payment for all unemployed, and for those temporarily incapacitated for work because of sickness or accident, was passed in 1944 and the benefits came into operation in July 1945. Sickness benefits were an entirely new form of assistance, never having been offered by the states. Private provision through friendly societies had been the main means of providing for temporary incapacity.

Early responses to unemployment growth: 1945 to 1988

The unemployment, sickness and special benefits scheme as originally implemented was designed for a labour market where full-time employment for a mainly male work force was the norm; only short periods of unemployment needed to be catered for and benefit levels could be kept low so as to avoid disincentives to work. Until the 1970s few changes were needed to the original legislation. The great increase in the number of beneficiaries and the duration of their receipt of benefits that occurred during the following decades resulted in considerable development of the legislation.

Initially the benefit system was modified without its basic form being changed in any fundamental way. Under the Fraser Government the emphasis was on tightening eligibility requirements to prevent abuses and increase work incentives. Waiting periods before a benefit could be paid were introduced for school leavers and the voluntarily unemployed in 1976. Proof of identity procedures were tightened in 1977. The type and location of employment that unemployed people could be expected to accept was greatly extended in 1979. This policy direction continued under the Hawke Government.

The active employment strategy: 1988 to 1993

New directions for reform were placed firmly on the agenda in the mid 1980s by the Social Security Review conducted by Professor Bettina Cass.[3] For the unemployed, the main area of change involved the extension of the work test, which had applied from the introduction of the benefit in 1944, into an activity test. First introduced for the young unemployed when Job Search Allowance was introduced in 1988, it was extended to all unemployment beneficiaries when Job Search and Newstart Allowances were introduced in 1991. Under the previous work test, an applicant for unemployment benefit ‘was required to show that he was capable of undertaking and willing to undertake “suitable” work and had taken reasonable steps to obtain such work.’[4] The new approach involved greater obligations on the beneficiary to participate in programs to improve 'job readiness' and subsidised employment programs.

Sickness Benefit was also reformed in 1991 with the introduction of Sickness Allowance. Duration on a benefit was restricted in most cases to one year with provision for extension of duration in limited circumstances.

Payments for those under 21 years of age were reformed during this period. Rates of payment were aligned with education-related income support. Parental income and assets were taken into account for the youngest beneficiaries. Payments designed to assist homeless young people were introduced.

Working Nation: 1994 to 1996

The 1994 White Paper entitled Working Nation announced further reforms to benefits for the unemployed as part of a larger package of measures to assist the long-term unemployed.[5] These changes were designed to provide incentives to seek part-time or casual employment through changes to the income test for both beneficiaries and their spouses. Direct assistance was also introduced for spouses of beneficiaries who were not in the labour force.

The White Paper included a further change to youth payments with the introduction of the Youth Training Allowance from January 1995. This change involved the transfer of income support for all those less than 18 years of age to the then Department of Employment, Education and Training. The aim was closer integration of unemployment and education-related income support for young people.

Mutual Obligation commenced: 1997

In 1997 the 'Work for the Dole' scheme was introduced as the first part of a broader 'Mutual Obligation' approach to the structure of income support and support programs for unemployed people.[6] Mutual Obligation was based on the concept that welfare assistance provided to the unemployed of working age should involve some return responsibilities for the recipient.[7] Initially aimed at the young unemployed, the concept was gradually extended to most unemployed people and also to those receiving payments because of their responsibilities for caring for children.

Youth Allowance introduced: 1998

In 1998 income support for young people was reformed with the introduction of a single payment for full-time students and unemployed young people. Parental support requirements were strengthened, rates of payment standardised for all young people and disincentives to study addressed.

Welfare to Work reforms: 2006

In 2006 parents with school-age children who would formerly have been eligible for Parenting Payment and people with disabilities who could do part-time work and would previously have been eligible for Disability Support Pension were paid Newstart Allowance or Youth Allowance with reduced participation requirements compared to other recipients of these payments. These changes were designed to achieve greater workforce involvement for these groups.

Detailed information

A detailed listing of the major changes to the payments available to the unemployed is provided in Appendix B. The payments included are:

Appendix B also includes details of:

A brief history of payments for widows in Australia

The introduction of Widow Pensions: 1942 to 1947

Income support for widows and some sole parents was introduced in 1942 by the Curtin Government. Curtin had included a commitment to introduce pensions for widows in his 1940 election campaign policy speech.[8] This form of income support had been included in most proposals from all sides of politics to expand the Commonwealth's involvement in income support since age and invalid pensions were introduced in 1909 and 1910 respectively. Unlike widow pensions introduced in the UK in 1925 and the USA in 1939, the Australian widow pension was not a contributory insurance-based payment and was therefore available to all widows who qualified under the means test. The structure of the new payment was drawn from the report of the Joint Parliamentary Committee on Social Security which had been asked in 1941 by the Menzies Government to inquire into widow pensions.[9] Consequently the legislation received bipartisan support.

From the beginning the name of the payment was misleading. It was designed to assist women who had lost a partner and could not be expected to engage in employment due to child care responsibilities or age. Not all women in this category were eligible. De facto widows (where they had lived with a man in a bona fide domestic basis for at least three years immediately prior to the death of the man), deserted wives, divorced women and women whose husbands were in institutions for the insane were included, but single mothers, wives of prisoners, women deserted by de facto husbands and women who had deserted their husband or agreed to separate were excluded. These exclusions reflected the influence on legislators of contemporary moral standards as did the requirement that pensioners be of 'good character' and 'deserving of a pension'. In this context the inclusion of assistance to de facto wives was somewhat controversial with protests from some conservative women's groups about the provision of assistance being condemned as encouraging adultery and undermining the institution of marriage.[10]

Three types of Widow Pension were introduced in 1942:

  • widows with children were given a class A pension while they had a dependent child
  • those without children were given a class B pension until retirement age if they were aged 50 years or older and
  • those without children and not old enough for a class B pension were given a class C pension for 26 weeks immediately after the death of their husband.

In 1947 a class D pension was introduced for women whose husbands were imprisoned for six months or more if they had care of a child or were over 50 years of age. This pension was paid under the same conditions as a class B pension.

Widow A Pension (WidA) is covered by the publication Social security payments for people caring for children, 1912 to 2008: a chronology.

The end of Widow Pensions: 1987 to 2006

The Hawke Government commenced a complete recasting of widow and sole parent payments in 1987 with the phasing out of Widow B Pension (WidB). Changing perceptions about the role of women and increases in the workforce participation of older women were beginning to make the payment redundant. A phasing-out period of 15 years for new claimants was provided for in the expectation that this would prevent any adverse consequences for older widows. However, the employment situation of older women deteriorated during the recession of the early 1990s. This prompted the announcement in 1994 of a Widow Allowance for women widowed after the age of 50 years with little workforce experience, as a means of reducing the impact of the phasing-out of WidB.

In 1989 the Widow C Pension (WidC) was renamed Widowed Person Allowance and eligibility was extended to widowers as well as widows both de jure and de facto. In 1994 this new payment was renamed Bereavement Allowance.

In 2006 Widow Allowance was closed to new claimants unless they had been born on or before 1 July 1955.

The demise of the various widow payments marked the end of a transition from payments for 'respectable' widows with a few categories of ‘less respectable’ sole parents hidden under the umbrella term widow pension, to payments based on the objective fact of recent death of a partner.

Detailed information

A detailed listing of the major changes to the payments available to widows is provided in Appendix C. The payments included are:

Appendix C also includes details of:

Widow Allowance is paid under the same conditions as Newstart Allowance, for which details can be found in Appendix B.

A brief history of assistance with rent: 1958 to 2012

Supplementary Assistance was introduced in 1958 for single pensioners and all classes of widows paying rent and who were almost entirely dependent on the pension. This was a recognition that some groups of pensioners were entirely dependent on their pensions and hence in greater need than others.

In 1970, long-term sickness beneficiaries who paid rent became eligible for Supplementary Allowance, determined on an individual basis but paid up to the maximum rate of, and under similar conditions to, Supplementary Assistance. Supplementary Assistance and Supplementary Allowance were combined and renamed Rent Assistance (RA) in 1985. In 1986, RA was extended to some unemployment recipients with dependent children who rented privately. It has subsequently been extended, subject to income and rent threshold tests, to most income support recipients who are renting privately as well as to low-income Family Tax Benefit recipients who are not in receipt of income support payments.

Detailed information

Details of the major changes to Supplementary Allowance and Rent Assistance are provided in Appendix D, together with maximum rates payable since 1970.

Note on sources and further reading

In addition to the Commonwealth Budget Papers and social security legislation (and the associated Bills Digests), the following publications have been used in the preparation of this paper:

List of Acronyms

AWOTE

Average Weekly Ordinary Time Earnings

BA

Bereavement Allowance

CDEP

Community Development Employment Projects Scheme

CES

Commonwealth Employment Service

CPI

Consumer Price Index

DSS

Department of Social Security

GFC

Global Financial Crisis

GST

Goods and Services Tax

HCCA

Home Child Care Allowance

JSA

Job Search Allowance

MAA

Mature Age Allowance

MAPA

Mature Age Partner Allowance

MTAWE

Male Total Average Weekly Earnings

MGA

Mother's/Guardian's Allowance

NSA

Newstart Allowance

PA

Partner Allowance

pf

per fortnight

PgA

Parenting Allowance

RA

Rent Assistance

RAA

Remote Area Allowance

SA

Sickness Allowance

SB

Sickness Benefit

SEAM

School Enrolment and Attendance Measure

SpB

Special Benefit

UB

Unemployment Benefit

WA

Widow Allowance

WFTD

Work for the Dole Scheme

WidA

Widow A Pension

WidB

Widow B Pension

WidC

Widow C Pension

WidD

Widow D Pension

WPA

Widowed Person Allowance

YA

Youth Allowance

YHA

Young Homeless Allowance

YTA

Youth Training Allowance


[1].       Department of Human Services (DHS), ‘How can we help you?’, DHS website, viewed 29 November 2012, http://www.humanservices.gov.au/

[2].       For a full discussion of the considerations of an insurance-based scheme see TH Kewley, Social Security in Australia: 1900–72, Sydney University Press, Sydney, 1973, pp. 140–65.

[3].       B Cass, Social Security Review issues paper no. 4—income support for the unemployed in Australia: towards a more active system, Australian Government Publishing Service (AGPS), Canberra, 1988.

[4].       TH Kewley, op. cit., p. 266.

[5].       PJ Keating, Working Nation: policies and programs, AGPS, Canberra, 1994.

[6].       P Yeend, Mutual obligation/work for the dole, E-brief, Parliamentary Library, Canberra, 2004, viewed 13 November 2012, http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Publications_Archive/archive/dole

[7].       J Howard, ‘Answer to Question without Notice: Youth unemployment’, [Questioner: L Anthony], House of Representatives, Debates, 10 February 1997, p. 446, viewed 2 October 2012, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22chamber%2Fhansardr%2F1997-02-10%2F0044%22

[8].       J Curtin, Policy speech, Australian Labour Party policy document, Election 1940, p. 7, viewed 2 October 2012, http://parlinfo.aph.gov.au/parlInfo/download/library/partypol/1029445/upload_binary/1029445.pdf;fileType=application%2Fpdf#search=%22Curtin%22

[9].       Joint Committee on Social Security, First Interim Report: Social Security Planning and Legislation, Commonwealth Government Printer, Canberra, September 1941.

[10].      TH Kewley, op. cit., p. 216.

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