Ever since Wayne Swan gave his 2011 Budget Speech and released those budget papers the mainstream media has been bellowing. One cry is that this budget is hard on the 'deserving' middle class and an alternative cry is that it is unfair to all welfare recipients on parenting payment, unemployment benefit or disability support pension.
What is not pointed out (by either politicians being interviewed or journalists doing the interviewing) is that not all these reforms are universal across specific cash transfer categories, many do not commence until the 2012-13 financial year and some take the form of trial roll-outs with an identified end date.
So let us look briefly at some of the groups mentioned in those claims.
Firstly, teenage mothers. They are not all going to be made to attend Centrelink when their baby reaches six months of age, according to Part 2: Expense Measures :
Teenage parents accessing Parenting Payments for the first time from 1 January 2012 in 10 targeted Local Government Areas (LGAs will be required to attend six‑monthly interviews with Centrelink once their child turns six months old. Once the child is one year old, this interview will be used to develop and implement a participation plan, which will include activities to improve education outcomes for themselves and their children.
Secondly, the mature unemployed and young unemployed are not all going to have to face every new participation requirement to claim unemployment benefits:
The Government will …..introduce new participation requirements and support services for parents who have been on income support for more than two years or who are under 23 years of age in 10 targeted Local Government Areas (LGA's). Parents will be required to attend compulsory workshops and interviews with Centrelink to set personal and family goals. They will also be assisted to access services to overcome pre‑vocational barriers to employment, engage with their community and improve health and education outcomes for their children. The new requirements and support services will commence on 1 July 2012 and will be available in 10 targeted locations.
Currently a job seeker is required to undertake an approved activity for six months in each year they are in the Work Experience Phase. From 1 July 2012, very long‑term unemployed job seekers who begin a second year in the Work Experience Phase will be required to undertake work experience for 11 months of the year.
The 10 targeted LGAs are:
Greater Shepparton (VIC)
Thirdly, those with a disability. Individuals already on a Disability Support pension will not all have to meet the new requirements (some of which are voluntary agreements) and indeed they gain some additional concessions, according to Part 2: Expense Measures Families, Housing, Community Services and Indigenous Affairs :
The Government will introduce participation requirements for new and existing Disability Support Pension (DSP) recipients under the age of 35 with some work capacity from 1 July 2012……[those] who have a work capacity of less than eight hours a week, or who are already participating in open employment, an Australian Disability Enterprise or the Supported Wage System, will be excluded from the participation requirements.
From 3 September 2011, Disability Support Pension (DSP) claimants will need to provide evidence that they have tested their future work capacity by participating in training or work related activities. This activity test will not apply to claimants who are clearly unable to work due to, for example, profound disability.
extends portability where a DSP recipient with a severe disability has a carer who is posted overseas for work and wishes to continue their supporting responsibilities. In these circumstances, the DSP recipient will be entitled to continue to receive their pension for the period of their family member's posting, from 1 July 2011.
The Government will allow all Disability Support Pension (DSP) recipients to work up to 30 hours a week and remain eligible for a part‑pension for up to two years.
A $2,000 one‑off tax‑exempt payment will be also available to children of families living in outer‑regional, rural and remote areas to help meet some of the costs of accessing services.
Finally, families. The majority of families with legitimately dependent children are not being cut off welfare payments, but indexation of family payments is frozen between 1 July 2011 and 1 July 2014:
The Government will defer the implementation of Paid Paternity Leave by six months from 1 July 2012 until 1 January 2013.
The Government will, from 1 January 2012, limit the eligibility for Family Tax Benefit (FTB) Part A to children up to the age of 21 years, recognising that young people aged 22 and over are considered independent. When a child turns 22 years of age, parents will no longer be able to receive FTB Part A for that child. However the child may be eligible to receive Youth Allowance subject to usual means testing and academic progress rules. This will bring FTB Part A in line with the Youth Allowance age of independence from 1 January 2012.
The Government will pause indexation of the Family Tax Benefit (FTB) Part A and B supplements for three years. The FTB supplements will be fixed at the current 2010‑11 levels of $726.35 per annum per child for FTB Part A and $354.05 per annum for FTB Part B until 1 July 2014.
The Government will pause indexation of family payment higher income thresholds and limits at their current level until 1 July 2014. The following higher income thresholds and limits will remain fixed until 1 July 2014: Family Tax Benefit (FTB) Part B primary earner income limit, which will remain at $150,000; the income limit for receiving the dependency tax offsets, which will remain at $150,000; the Baby Bonus eligibility limit, which will remain at $75,000 of family income in the six months following the birth or adoption of a child, equivalent to $150,000 a year; the Paid Parental Leave primary carer income limit, which will remain at $150,000 in the financial year before the birth or adoption of a child; and the higher income‑free threshold of FTB Part A, which will remain at $94,316 of family income, with an additional $3,796 provided for each child after the first.
The genuinely bad news is that income management for welfare recipients will be extended (presumably allowing government access to increased interest accrued from cash transfers held in trust in a central managed account) beyond existing declared areas into the following new areas from 1 July 2012 until 30 June 2015:
Bankstown, New South Wales
Playford, South Australia
In this single aspect, the Gillard Government (like the former Howard Government) is determined to see the once honourable welfare safety net system morph into a shameful food stamp allowance for those living in comparative poverty.