The National Welfare Rights Network (NWRN) has provided evidence to a parliamentary inquiry into the government’s revised 4-week waiting period, telling the Senate Committee that 75,000 people under 25 will be hit by the four week waiting period, and 10,000 young people will have to serve two waiting periods over a 12-month period.
Kate Beaumont, President of the National Welfare Rights Network said: ‘While the new policy is not as punitive as last year’s offering which would have made job seekers under 30 wait six months without payment, it would still place 75,000 young people in severe financial hardship, leaving them without food and money to pay their rent. The government claims that 83,000 young people will be exempted from the month long waiting period.
‘The Bill will also tighten eligibility for the one week waiting period and increase the eligibility age for the Newstart Allowance to the age of 25. Many people will serve at least five weeks of waiting periods and young unemployed people aged 22 to 24, who will no longer be eligible for the higher Newstart Allowance or Sickness Allowance, will be left with up to $48 a week less.
‘During the one-month waiting period young people will still be required to attend activities, such as meeting with an employment service provider and undertaking job search, which for most means applying for 20 jobs a month. During this ‘pre-benefit’ stage a job seeker will also need to agree to a job plan, develop a resume and create a profile on the JobSearch website. If they fail to fulfil these requirements they will not be eligible for benefits and they will have to go back to Centrelink and start the process again, with another month before they get any payments.
‘New Senate data from the Department of Social Services reveals that only 1.2 per cent of young people under 25 on Newstart had sufficient savings to be impacted by a Liquid Assets Waiting Period. In 2013-14, only 3,650 job seekers under 25 had sufficient backup savings to cover essential living costs during the non-payment period.
‘A person on the minimum wage would find it difficult to survive a few weeks without any regular income. So why are we cutting payments for young people who live on at most a Youth Allowance of just $213 a week, which is only 32 per cent of the minimum wage?
‘The measures in this Bill have brought us to a tipping point with regards to inter-generational equity in this country. History will judge us poorly if we don’t give Generation Y the hand up that they need. Our youth should not have to carry the burden of the labour market’s structural failings.
‘We need to avoid scarring tens of thousands of young people each and every year with a raft of harsh and punitive social security policies that basically blame them for the failures of the labour market to provide sufficient jobs for all those that want them.
‘The government talks about investing in people – NWRN agrees. This starts with an adequate investment in a decent social security system for young people starting off.
‘With 60 per cent of young unemployed on Youth Allowance classified as long-term unemployed, addressing this problem should be prioritised ahead of other policies, including the poorly conceived and harmful suite of measures that are included in this Bill. We urge the Parliament to abandon the 4 week waiting period and to scrap the one week waiting period.
‘Additionally, it is time to put a halt to plans to place young job seekers aged between 22 and 24 on the lower Youth Allowance, which will result in an annual loss of $2,500, and to push the pause button on freezing the indexation of the ‘income-free’ areas and other thresholds, which will result in an annual loss to young unemployed people and students of $138.4 million over four years.
‘This plan isn’t a path to self-sufficiency; it’s a one-way street to poverty, with impacts on long term unemployment, poor health, depression and homelessness. This is borne out by government allocating $8.1 million to help pay the bills of people made destitute by this very policy. That Centrelink will re-classify people and grant them exemptions if their situation deteriorates during the 4-week waiting period should be enough to convince the public that this is a bad idea, is poor social policy and should be rejected.’
Other key facts about the Social Services Legislation Amendment (Youth Employment and Other Measures) Bill 2015:
- The four-week waiting period comes at a substantial cost to job seekers, at $173.3 million over 4 years.
- The indexation pause to thresholds and income free areas means a cut in real terms, which means a $134.8 million cut in assistance for job seekers and students.
- The re-introduction of plans to extend Youth Allowance and Sickness Allowance (other) from age 22 to age 24, from 1 July 2016, is a $517 million cut in support for young people over four years.
- The one-week Ordinary Waiting Period to all payments, including Single Parents – excluding Widows Allowance, would take a further $274.8 million over four years from people receiving working age payments.
- Department of Social Services data on Youth Allowance at March 2015:
- There were 105,692 people receiving Youth Allowance (job seeker).
- 17,300 young people, or 17.3% were from an Indigenous background,
- 56,360, or 53% were male, and
- 19,700 or 18.7% reported earnings from employment (for Newstart Allowance, 21.3%,