Budget Review 2022–23 Index
This article examines changes in expenditure on social
security and significant social security budget measures. Changes to Paid
Parental Leave are examined in a separate article in this Budget review.
Total expenditure on payments
strategy and outlook: budget paper no. 1: 2022–23 shows that estimated
expenditure on the main social security and veterans’ payments will decline by
7.9% from 2021–22 to 2022–23: from around $168.0 billion to $154.8 billion (Parliamentary
Library calculations based on expense data at pp. 144, 154–158). Total
expenditure is projected to increase steadily from 2022–23 to around $168.1
billion in 2025–26. This total includes spending on pensions, payments for job
seekers, family assistance payments, Paid Parental Leave, veterans’ payments,
and other small social services programs, but excludes spending on student
payments (which are included under the education category of expenses in the
budget papers), the National Disability Insurance Scheme and aged care
services. The main reasons for the anticipated decline in expenditure from
2021–22 to 2022–23 are the closing of the COVID-19 Disaster Payment in late
2021; the closing of the Pandemic Leave Disaster Payment at the end of June
2022; and an expected decline in the number of recipients of JobSeeker Payment
and Youth Allowance (Other) (the main unemployment benefits) (Budget
paper no. 1, p. 142).
The Age Pension and aged veterans’ Service Pension is the
largest component of social security expenditure at $54.2 billion, representing
over a third of social security payment expenses in 2022–23. Family assistance
(including Family Tax Benefit and Paid Parental Leave) is the second largest
component followed by the Disability Support Pension.
Expenditure on the main unemployment benefits is expected to
decline from $15.8 billion in 2021–22 to $12.5 billion in 2022–23. Revised
forecasts of unemployment benefit recipient numbers since the 2021–22 Mid-Year
Economic and Fiscal Outlook have resulted in a decrease in projected
expenditure on these payments of $7.7 billion over the four years to 2025–26 (Budget
paper no. 1, p. 94).
Figure 1 Estimated expenses
on social security and welfare payments ($ billion)
excludes student payments, National Disability Insurance Scheme and aged care
Source: Australian Government, Budget strategy and outlook: budget paper no. 1: 2022–23, pp. 144, 154–158.
$250 one-off payment
The largest 2022–23 budget measure in the Social Services
Portfolio is a one-off ‘Cost of Living’ or economic support payment for income
support recipients worth $250 (Budget
measures: budget paper no. 2: 2022–23, p. 167). The payment will be
made in April to
recipients of all social security and veterans’ income support payments,
concession card holders and some veterans’ compensation payment recipients
including pensions, JobSeeker Payment, Parenting Payment, student payments,
Farm Household Allowance, veterans’ Disability Pension, and permanent impairment
payments under military compensation schemes (pp. 87–90). Legislation
providing for the payment was introduced and passed by the Parliament on 30
March 2022. Total expenditure on the payment is estimated at $1.5 billion.
An individual can only receive one $250 payment regardless of how many eligibility
categories they meet.
Frequent use of ‘one-off’ payments
‘One-off’ or lump-sum payments to social security recipients
in response to economic downturns or to address concerns around price increases
have been frequently paid under the Coalition Government. An Energy Assistance
Payment worth $75 for singles and $125 for couples was paid in 2017 to certain
part of a deal between the Government and the Nick Xenophon Team to
secure passage of a Bill providing for company tax cuts. Another
Energy Assistance Payment, paid at the same rates but to a broader group of
recipients, was made in 2019 prior to the Federal Election. As part of the
COVID-19 response, the
Government has provided four ‘Economic Support Payments’ to certain social
security recipients: two $750 payments made in March and July 2020, and two
$250 payments made in November 2020 and February 2021.
Groups missing out
Family Tax Benefit recipients were eligible for the COVID-19
Economic Support Payments (except where they received the lump attached to
another qualifying payment or where they were in receipt of the separate
Coronavirus Supplement paid to allowance payment recipients). Family Tax
Benefit recipients are not eligible for the 2022–23 Cost of Living Payment unless
they are receiving a qualifying income support payment at the same time. Low
Income Health Care Card holders were not eligible for any of the Energy
Assistance Payments or COVID-19 Economic Support Payments and will not be
eligible for the Cost of Living Payment.
The repeated use of lump-sum payments to address financial
stress amongst income support recipients raises a question as to the adequacy
of income support payments and whether there is an issue with the lag between
price increases and the regular indexation of these payments.
Council of Social Service CEO Cassandra Goldie stated that the one-off
payment would ‘help for a week or two’ but that the Budget ‘does nothing to
lift the incomes of people with the least’. Economic
Justice Australia, which represents community social security legal
services, stated that the ‘one-off payment will do little to help the people
who most need support to cover the basics of a home, food and medicine’, and
its CEO, Leanne Ho, called for the rate of JobSeeker Payment and other
allowances to be raised.
2021–22 has seen significant expenditure on disaster
payments, both those created in response to COVID-19 and those paid following
natural disasters, and the Budget includes a commitment to review the
effectiveness of disaster payments.
COVID-19 Disaster Payments
Disaster Payment was created in June 2021 to assist those who had lost work
because of state and territory government lockdowns (p. 1). In September 2021,
announced the payment would no longer be available two weeks after a state
or territory reached 80% of its population aged 16 and over with two doses of a
COVID-19 vaccination. All
jurisdictions reached this threshold between mid-October and mid-December
2021 (p. 6). Around $12.9 billion in COVID-19
Disaster Payments were made to 2.4 million people (p. 21).
Leave Disaster Payment, paid to those required to quarantine, isolate or
care for someone with COVID-19 without access to paid leave entitlements from
their employer, was created in August 2020 (p. 9). In September 2021, the
Government announced the payment would end on 30 June 2022. As
at 27 March 2022, around $1.1 billion in Pandemic Leave Disaster
Payments had been made to around 980,000 individuals.
Natural disaster payments
Government Disaster Recovery Payment (a lump sum payment of $1,000 per
adult and $400 per child) and the Disaster
Recovery Allowance (a time-limited payment equivalent to the rate of
JobSeeker Payment or Youth Allowance) are authorised under the Social
Security Act 1991 but not included in the social security and welfare function
reported in the budget papers (instead, they are included in the ‘Other
purposes’ function). Both
payments have been activated in response to the floods in NSW and
Queensland in early 2022. Two further payments equivalent to the rate of the
Disaster Recovery Payment have been made to those affected by flooding in
certain local government areas in NSW. Additional payments of this lump sum
have not been made in response to previous natural disasters. The exclusion of
some flood victims from this additional assistance has
been a contentious issue.
On 30 March 2022, Prime
Minister Scott Morrison stated that $1.3 billion in disaster recovery
payments had been paid to 1.4 million people affected by the floods. This
level of assistance indicates the massive impact of this disaster: by contrast,
around $286.1 million in payments were made for around 205,000 claims in
response to the 2019–20 bushfires (pp. 458–459) while around $475.0 million
in payments were made for around 400,000 claims following the 2010–11
Queensland floods (p. 67).
The Budget included an announcement from the Government that
it would implement the recommendation of the Royal Commission that followed the
2019–20 bushfires and review disaster recovery funding arrangements (Budget paper
no. 2, p. 159). The costs of the review would be met from within existing
resources of the National Recovery and Resilience Agency. The
Royal Commission had recommended a review of the effectiveness of financial
assistance measures with the aim of providing consistency in the treatment of
affected individuals and businesses (p. 463).
Reduction in the number of
unemployment benefit recipients
As noted above, revised forecasts of unemployment benefit
recipient numbers have seen a decrease in projected expenditure on these
payments of $7.7 billion over the 4 years to 2025–26. Budget
paper no. 1 states that the revision is ‘due to stronger labour market
projections as the economy recovers from the COVID-19 pandemic’ (p. 94).
While the unemployment rate has dropped below pre-pandemic
levels, the number of people in receipt of unemployment benefits has not
declined at the same rate. As at mid-March 2022, there were around 145,500 more
people on JobSeeker Payment and Youth Allowance (Other) than there were in
February 2020 (Figure 2). In particular, the number of recipients of these
payments aged 55 and over has declined at a much slower rate than younger age
Figure 2 JobSeeker and Youth
Allowance (Other) recipients
Notes: Notes: JobSeeker Payment replaced Newstart Allowance,
Sickness Allowance and Bereavement Allowance from March 2020—these
payments are included in the totals.
Sources: Department of Social Services (DSS), ‘JobSeeker
Payment and Youth Allowance recipients - monthly profile',
data.gov.au website; DSS, ‘Fortnightly report on income support payments by
state/territory and Statistical Area Level 2, as at 11 March 2022',
provided to Senate Select Committee on COVID-19 on 18 March 2022.
Unlegislated measures still in the
A number of significant social security measures previously
announced have not been legislated but the forecast savings or expenditure for
these measures remain in the Budget:
All online articles accessed April 2022
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