Coalition warned welfare overhaul could worsen poverty and unemployment

Christopher Knaus
The Coalition’s welfare bill introduces tougher punishments for jobseekers who fail to meet their mutual obligation requirements. Photograph: Matt King/Getty Images

The government’s planned overhaul of the welfare system could push the most vulnerable further into poverty and undermine their ability to get a job, the Australian Council of Social Service has warned.

Welfare advocacy groups are in Canberra this week mounting a final effort to convince Senate crossbenchers not to pass the harshest elements of the Coalition’s social security legislation.

The bill introduces tougher punishments for jobseekers who fail to meet their mutual obligation requirements and ends the ability for welfare recipients to notify the department of an “intent to claim”, should they find themselves unable to lodge a claim for social security in full.

The government also plans to save $198m by effectively delaying the commencement date of certain Newstart and Youth Allowance payments.

Currently those welfare payments begin when the recipient first meets with an employment services provider but are backpaid to the date a claim for welfare is first made.

The government plans to end that backpay arrangement, saying doing so would encourage welfare recipients to meet employment services providers with more urgency and increase their prospects of finding work.

But the chief executive of Acoss, Cassandra Goldie, said that incentive already existed in the current system, because welfare recipients didn’t get their first payment, including the backpay, until they met with a service provider.

“We cannot understand why the government is doing this, other than to cut the incomes of people already doing it tough, and make budget savings at their expense,” Goldie told Guardian Australia. “People who are looking for paid work already have a huge incentive to connect quickly with their job service provider. They won’t get paid until they do.”

Acoss has also recently called for a $75 per week increase to Newstart.

But social services minister Dan Tehan said about two-thirds of people on Newstart exit income support within 12 months, and “99% receive additional payments and supplements.

“The government is focused on getting people off welfare and into work with a strong economy that is creating 1,100 new jobs every day,” Tehan said.

The joint parliamentary committee on human rights last year raised concerns that the change may breach human rights, namely the right to social security and the right to an adequate standard of living.

The committee also raised concerns about the government’s justifications for the change.

“At present, payment of Newstart and Youth Allowance is not made until the claimant, unless exempt, attends an interview with a job services provider,” the committee said.

“Therefore, an incentive to connect with a job services provider would appear to already exist. The statement of compatibility does not explain why this existing measure is inadequate in encouraging Newstart and Youth Allowance claimants to connect promptly with their job services provider.”

The changes only apply to welfare recipients who are in RapidConnect, a program designed to fast-track welfare recipients into employment.

The explanatory memorandum to the bill says the most disadvantaged jobseekers are exempt from the RapidConnect program.

Goldie said unemployment payments were now so low that they were acting as a “barrier to employment”. She urged increases to payment levels so they were adequate to ensure “everyone has a roof over their head and food on their tables”.

“It is near impossible to look for work if you are homeless and hungry,” Goldie said.