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Issue #1543      18 April 2012

Unemployed short-changed by 20 cents per day increase

“1.1 million Australians, including 566,000 unemployed people on the Newstart Allowance of just $35 a day have every right to feel short-changed with last monh’s $1.45 per week indexation increase to Newstart Allowance,” said Maree O’Halloran of the National Welfare Rights Network (NWRN).

“The increase for Australia’s 3.4 million pensioners is not much better, at $3.35 per week. (People on Youth Allowance and Abstudy did not receive an increase. They only receive one indexation increase per year in January and fare the worst of all.)

The “payment gap” between Newstart Allowance and pensions is now $132.90 a week. On a yearly basis, job seekers are expected to get by on $6,910 less than that available to age, disability and carer pensioners.

Pensioners fought long and hard for the historic and much needed increase of $32.50 to the single pension in 2009. The single pension (including the Pension Supplement) is $377.75 a week. The Newstart Allowance is just $244.85 per week.

Unemployed people, students and single parents missed out on the 2009 pension increase. This omission, combined with less generous indexation arrangements, has meant that income support payments for the so-called “undeserving poor” have barely increased since 2009. While the single pension rate increased by $77 a week since 2009, the rate of Newstart Allowance increased by just $16.55 over the same period.

The widening gap between pensions and allowances is of growing concern to welfare and community organisations, charities and emergency relief providers. An additional concern is that policies pursued by successive governments have resulted in increasing numbers of single parents and people with disabilities being moved onto lower-paying allowances.

Furthermore, a Senate inquiry supported moving an additional 28,000 single parents onto Newstart Allowance over the next four years. These changes, commencing from 1 January 2013, will mean a single parent in this group on the maximum payment will be $59 a week worse off.

Across the political spectrum and on the street, there is a growing consensus that $244 per week is not enough for unemployed workers. The catalyst for agreement for an increase to Newstart Allowance was the 2009 Henry Tax and Transfer Review which recommended in May 2010 that the rate be increased by $50 per week in today’s terms.  

Next article – Culture & Life – Lock up your poor

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