Massive youth debt a national disgrace
by Jules Andrews An alarming 62 per cent of young homeless people are in debt to Centrelink has been revealed by new research. This horrific statistic is among many that point to a serious debt crisis facing many young people across Australia. The Youth Allowance, a Centrelink payment that is meant to assist young people into employment, training or education, is instead "providing little more than pocket money and forcing young people into a spiralling cycle of debt" according to the President of the Welfare Rights Network, Michael Raper. The report Runaway youth debt — no allowance for youth was released to coincide with the United Nations Anti-poverty Day. The problem begins because Youth Allowance payments, at between $83 and $150 a week, are woefully inadequate. As a result, large numbers of people on Youth Allowance are forced to borrow from Centrelink in the form of an advance payment of up to $500. Repayments are then deducted from their Youth Allowance at the rate of $20 per week. A further 135,000 people on Youth Allowance (36 percent) have a debt to Centrelink for other reasons. This is a striking indictment of the subsistence level of the Youth Allowance. The highest incidence of debt occurs in the 18 to 20 year old Independent group (43 percent of whom are homeless) where the rate of Centrelink debt is 68 percent! The next highest debt incidence is in the under 18 year old Independent group (81 percent of whom are homeless) where the rate of Centrelink debt is 57 percent. "A system that produces such high rates of debilitating debt among our most vulnerable homeless youth is seriously flawed and needs an urgent overhaul", said Mr Raper. These problems are further compounded by very high Centrelink breach rates. Harsh breach penalties further reduce weekly payments by a minimum of $24 per week. Payments may be cancelled altogether for eight weeks. Any of these debts could lead to the maximum weekly repayment for a homeless person of $37 a week or $5.28 per day! As a final cruel blow, the NSW State Government then rescinds the transport concession cards of unemployed people because they are not receiving the "full rate" of benefits. How can they survive, pay rent, buy food, books, a bus ticket or dress for an interview? "Many of the young people who are landed with such massive debts are homeless because of family dysfunction — often due to alcohol, gambling, drugs and/or violence. The system should be providing a hand up not a put down." Mr Raper said The blame for this national disgrace can only be laid directly at the feet of the Federal Government. The cruel Social Security reforms of the last six years, coupled with massive funding cuts for education and training is consigning a generation of young Australians to the economic wasteland. The Welfare Rights Network has called for an immediate inquiry into the Youth Allowance and the massive levels of debt imposed by Centrelink on young people, especially homeless young people.