6.1
In addition to the barriers to employment discussed in Chapter 5, some income support recipients experience additional challenges that further compromise their ability to secure work.
6.2
The committee received considerable evidence in relation to the additional barriers to employment experienced by the following cohorts:
people with disability and medical conditions who have no or partial capacity to work;
older unemployed workers;
people living in remote, rural and regional Australia;
First Nations Peoples; and
young people on Youth Allowance (jobseeker).
6.3
The committee heard that these groups are more likely to be long-term recipients of Newstart and related payments, and have been more negatively impacted by specific policy changes than other unemployed workers.
6.4
The chapter examines their specific circumstances and focuses on the relevant, additional policies that apply to these groups.
People with disability and medical conditions
6.5
One in four people on Newstart has only a partial capacity to work because of chronic illness or disability.
6.6
According to submitters, the number of people who are sick and/or living with disability and who have been placed on Newstart rather than the Disability Support Pension (DSP) has reached at least 200,000.
6.7
Submitters pointed out that being on Newstart is even harder for people with disability or medical conditions as they often have higher living costs associated their conditions, such as specialist appointments, medication and aids.
6.8
Furthermore, inquiry participants argued that Newstart is not supposed to be a long-term income support payment, and has not been designed to provide adequate long-term financial support to people with disability.
Disability Support Pension eligibility criteria
6.9
The current eligibility criteria for DSP are outlined in Chapter 1. Over time, a series of incremental changes have been made to the DSP. In 2006 the work capacity assessment was lowered from 30 to 15 hours per week. As a result, applicants assessed with a partial capacity to work between 15 and 29 hours per week, no longer qualified for the DSP. In 2012, the changes to the impairment tables also tightened the eligibility to DSP. The 2014-15 reforms amended both the types of medical evidence to be provided by applicants and the assessment methods used to assess them.
6.10
Changes to the eligibility criteria of the DSP in 2014-15 have led to a significant increase of people with disability and partial capacity to work receiving Newstart payments.
6.11
The number of people receiving the DSP declined from 800,000 in June 2014 to just over 745,000 in June 2019.
6.12
Services Australia provided the committee with information regarding the rejection rate of the DSP, which was 62.6 per cent in 2018-19.
6.13
Disability advocates have criticised the reforms as they fail to consider variability in presentation and effects of disability, such as episodic disability and complex needs that do not fit into one impairment type.
6.14
A Newstart recipient with a damaged spine and bipolar disorder highlighted the issue with the DSP criterion of the need for a medical condition to be fully treated and stabilised:
I am not eligible for the Disability Support Pension because in Centrelink's words my spine disability is not stable. I have specialist and doctor's reports saying that I can't work.
6.15
A support worker described how very sick people no longer qualify for the DSP:
It is getting very difficult for people to meet the narrow eligibility criteria and to be assessed as meeting them. People I have seen (variously) struggling to get out of bed due to prostate cancer, having severe epilepsy, mental health issues, making suicide attempts – none of these have been eligible for DSP.
Impacts of the changes
6.16
Submitters explained to the committee that the application for DSP has become very onerous and time-consuming.
6.17
Due to the onerous process of applying for the DSP, Legal Aid Queensland noted that many of their clients were unable to afford the cost of obtaining relevant reports to evidence the stability and extent of their impairments when lodging a DSP application.
6.18
Similarly, Associate Professor Karen Soldatic at Western Sydney University told the committee:
All applicants of our research have found that the DSP application process, particularly since 2015, is severely onerous […] It also places significant imposts on carers and families' household economies. Carers and families draw upon household resources to fund DSP assessments.
6.19
The committee also noted the decline in number of claims assessed since the 2014-15 changes, which went from 141,000 claims assessed in 2013-14 prior to the changes to 91,000 claims assessed in 2018-19.
6.20
Furthermore, submitters argued that the mutual obligations associated with Newstart were not appropriate for people with disability or serious illnesses.
6.21
For example, In their joint submission, Cancer Council Australia and Oncology Social Work Australia and New Zealand, explained to the committee that people with cancer are being forced to remain on Newstart with a medical clearance they must renew every three months so they are exempt from looking for work, and added:
Doctors often question why they are required to complete regular medical certificates for patients when they have already indicated that the patient may never be able to return to work. Therefore, the Newstart Allowance is not an appropriate income support payment for people affected by cancer.
Eligibility criteria for Disability Support Pension
6.22
Submitters recommended changes to the eligibility criteria for the DSP to ensure that people who are deemed unable to work because of a disability or a medical condition are eligible for the DSP.
6.23
Removing the 'fully treated and stabilised' criterion from the eligibility requirements was suggested to the committee. This would enable individuals with fluctuating illness and conditions, particularly whilst receiving treatment, to be considered for the DSP.
Barriers to employment
6.24
Australia's employment of people with disability remains significantly lower than the OECD average, ranking 21 out of 29 OECD countries. In Australia, the employment rate is 39.8 per cent for people with disability.
6.25
People with disability experience additional barriers to employment. This includes the stigma still associated with disability, limited workplace adjustments to accommodate the particular needs of people with physical and mental health conditions, and assumptions made by employers about time out of the workforce.
6.26
Discrimination in the workplace is a major issue and a key barrier to employment.
6.27
People With Disability Australia (PWDA) conducted a survey of nearly 900 people with disability and found that 76.5 per cent of respondents had felt discriminated or treated unfairly, and 51 per cent were of the view that anti-discrimination laws did not help them when they had been treated badly.
Employment programs and mutual obligations
6.28
According to Jobs Australia, 28 per cent of the jobseekers engaged in mainstream employment programs have a disability.
6.29
According to Uniting Communities, at August 2019, 75 per cent of people who accessed Disability Employment Services (DES) are on Newstart and Youth Allowance payments, while only 11.5 per cent received DSP.
6.30
According to a research project undertaken by The Whitlam Institute within Western Sydney University, evidence suggests that 'employment service providers do not operate in a way which understands the lived experiences of people with disability nor in ways which could deliver employment outcomes'.
6.31
Advocacy for Inclusion reported cases where DES or mainstream employment programs offered positions to people with disability that were not taking account of people's disabilities, skills or interests. For example Ben who has a physical disability reported:
The staff is not interested, They are in control of you and your direction in your job search.
Government reforms
6.32
In their submission, the government agencies advised the committee that, in 2018, the Australian Government introduced reforms to the DES program to 'better assist job seekers with disability find and retain employment in the open labour market'.
6.33
According to the Australian Government, one year after the reforms, the average monthly number of participants completing 26 weeks of an employment or education placement increased by 14.4 per cent.
6.34
However, PWDA submitted that despite the reforms to DES, the system still does not meet the needs of people with disability, citing the following issues:
Independent advocacy and information is required to support us to make informed decisions around our choices of DES providers and assist us to navigate the system.
Committee view
6.35
The committee is of the view that the JobSeeker Payment is not designed to support people with disability or a medical condition who are unable to work. More to the point, the JobSeeker payment is supposed to be a temporary payment, and the mutual obligations attached to the payment have been put in place to ensure that people are looking for jobs and exit the program quickly. The reality for many people with disability or a medical condition is that it will take much longer for them to secure work, or that due to their circumstances and conditions, they may never be in a position to work again. As such, the committee believes that people who are unable to work because of a disability or a medical condition should receive the Disability Support Pension for as long as their condition prevents them working.
6.36
The committee is aware that the current Impairment Tables to assess DSP applicants' conditions and eligibility will expire in April 2022. The committee understands that the Department of Social Services has done preliminary work on a new review to take place prior 2022.
6.37
The committee recommends the Department of Social Services urgently undertake the review of the Impairment Tables that will expire in 2022 and ensure that people with disability or a medical condition who cannot work receive fit-for-purpose support.
6.38
The committee received evidence from inquiry participants, including in confidential submissions, that the mutual obligations requirements for people who are unable to work (or have been found with partial capacity to work because of a disability or medical conditions) are inappropriate, punitive by nature, and not conducive to recovery and workforce participation.
6.39
The committee noted the issues related to job services providers and Disability Employment Services. The committee believes that there is an urgent need for the Department of Social Services to immediately review the mutual obligation requirements in relation to job search activities for people who are unable to work due to a medical condition or a disability.
6.40
The committee recommends the Department of Social Services immediately undertake a review of mutual obligations requirements in relation to job search activities for people who are unable to work due to a medical condition or a disability.
Older workers
6.41
Those aged 55 to 64 make up the highest percentage of unemployed workers, and they remain on Newstart for longer than any other age group.
6.42
Data from the Department of Social Services indicates that the average single continuous time spent on Newstart for recipients aged over 55 is 188 weeks compared to an average of 162 weeks for all Newstart recipients.
6.43
As COTA pointed out, it is important to recognise that older people are not a homogenous group. There are multiple, complex narratives that lead to unemployment, and for many, long-term unemployment. However, a common barrier to employment is age discrimination.
Age discrimination
6.44
Older working-age jobseekers who participated in the inquiry expressed the view that their age was a key barrier to regaining employment.
6.45
For example, Frances, a 64-year-old woman, told the committee:
I am currently unemployed as all attempts to gain employment in my area of expertise have been fruitless. Attempts to gain employment in other areas have also been fruitless. I believe this is primarily due to my age.
6.46
COTA explained how age discrimination has permeated Australian society and workplaces:
Ageism is endemic in Australian society, and is evident in all facets of life, including in reduced access to employment, in the attitudes of employers to older workers, in lack of access to appropriate training and professional development and, in general, in the undervaluing of the skills, experience and earned wisdom of most older people.
6.47
It affects workers across the employment journey, from recruitment, to accessing training and promotion, and to redundancy.
6.48
A national survey on age discrimination in the workplace found that around 30 percent of employers indicated that their organisation has an age above which they are reluctant to recruit workers. Of those organisations, 68 per cent expressed unwillingness to hire workers over the age of 50.
6.49
The Benevolent Society cited the findings of the 2016 Willing to Work report by the Australian Human Rights Commission:
Discrimination against older people and people with disability is systemic and acts as a significant barrier to workforce participation.
Additional Challenges for women
6.50
It is important to note that older women face additional challenges to secure employment. Indeed, older women aged 55-59 years spend on average 191 weeks on Newstart, compared to 185 weeks for their male counterparts.
6.51
Older women of working-age (55-64 years) increasingly face financial insecurity and are forced to rely on income support payments. Contributing factors include:
separation, divorce and / or experience of domestic violence resulting in being unexpectedly impoverished and without a strong career pathway to sustain them;
over-representation in lower level positions;
increased likelihood of performing unpaid caring roles;
the interaction between gender and age discrimination.
6.52
Ms Stella Avramopoulos, CEO of Good Shepherd Australia New Zealand summarised the financial situation of older women:
Older women are retiring with little savings or superannuation, and many struggle to get a job or survive on Newstart until they receive the age pension.
Liquid assets waiting period
6.53
COTA is of the view that the liquid assets test disproportionately and negatively impacts older Australians.
6.54
The liquid assets waiting period is applied to income support claimants who have liquid assets, such as bank deposits, shares or financial investments.
6.55
Currently, if a person has liquid assets of more than $5,000 for a single person without dependants, or $10,000 for other claimants, at the time he or she becomes unemployed or claims payment, they may incur a liquid assets test waiting period of up to 13 weeks.
6.56
The Social Services Legislation Amendment (Payment Integrity) Bill 2019 currently before the Senate proposes to increase the liquid asset waiting period from a maximum of 13 to 26 weeks.
6.57
According to COTA, the assumption that all retirement assets sit in superannuation funds is incorrect, and therefore COTA argues that the Australian Government should consider changing the current liquid assets waiting period for Australians over 50 years.
6.58
At a public hearing in Sydney, Ms Charmaine Crowe, Senior Advisor at ACOSS, explained the impact of the liquid assets waiting period and recommended its abolishment:
We know that forcing people to deplete modest cash savings will inevitably make their lives more difficult the longer they are unemployed. […] we think that the liquid assets waiting period should be removed and replaced with a fairer way of means testing cash assets that an unemployed person may have.
6.59
Mr Corey Irlam, Deputy Chief Executive at COTA, told the committee that the Henry taxation review had also recommended the abolition of the liquid asset waiting period.
6.60
Mr Irlam also urged the Senate not to pass the current Social Services Legislation Amendment (Payment Integrity) Bill 2019.
Early access to superannuation
6.61
The committee received evidence that older Australians on Newstart are making requests for early access to their superannuation in order to cover basic expenses and reduce their financial stress.
6.62
According to the Commonwealth Treasury, applications for early release of superannuation funds have increased rapidly, driven by high out-of-pocket medical costs and financial hardship.
6.63
A 62-year-old woman on Newstart living in regional Australia told the committee how she accesses her superannuation to cover basic necessities and increase her chances of finding employment:
I am reducing my very meagre savings each week just to keep the roof over my head, food on the table and a vehicle running to try and find work […] This all comes from my superannuation, which is decreasing rapidly and will not be there for me in my retirement years.
6.64
The Combined Pensioners and Superannuants Association explained that 'savings are likely to be depleted to supplement the inadequacy of Newstart, leaving older people in a worse position for retirement'.
Impact of Newstart on the Age Pension
6.65
The Benevolent Society is of the view that the inadequacy of Newstart is undermining Australia's retirement system. It believes the impacts of the inadequacy of Newstart payment rates on the Age Pension system should be explored.
6.66
Similarly, EveryAGE Counts recommended the committee consider the impacts of the inadequacy of Newstart payment rates on Australia's retirement system.
Specialist jobseeker support
6.67
COTA is of the view that there is a need for job service providers who specialise in assisting older workers to find employment.
6.68
This was also the view expressed in the 2013 Australian Law Reform Commission's report Access All Ages – Older Workers and Commonwealth Laws, which recommended that job services be trained to respond to the needs of mature age jobseekers.
6.69
The Department of Employment, Skills, Small and Family Business advised the committee that the government had recently announced a range of skills-related training measures, including a new program aimed at those aged 45 and over.
Committee view
6.70
The committee is very concerned that it takes on average almost 4 years (188 weeks) for people aged over 55 to secure a job that enables them to stop relying on the JobSeeker Payment. Additionally, it is likely that some of these older jobseekers directly transition from the JobSeeker Payment to the age pension as they cannot find employment. The negative impacts on their personal lives, wellbeing, living standards and retirement plans have significant implications and flow-on for the Australian economy and its sustainability.
Ageism
6.71
Age discrimination, whilst illegal, is happening and profoundly disadvantaging older jobseekers. Efforts towards improving existing and developing new targeted programs to upskill or retrain older unemployed income-support recipients are to be encouraged and expanded. However, this will not be enough to significantly increase the likelihood of employment of older jobseekers if ageism in employment is not addressed.
6.72
The committee recommends the Australian Government work with employer groups to reduce the social, economic and budget costs of age discrimination.
6.73
The committee recognises that the issue of ageism in employment deserves to be further explored so adequate policies and educational campaigns can be put in place to change society's attitudes towards older workers, and more broadly towards older people.
6.74
The committee recommends the Senate consider referring to the Education and Employment References Committee an inquiry into age discrimination in employment.
Impacts on the Age Pension system
6.75
The committee is very concerned by the evidence it received in relation to older unemployed people accessing their superannuation early to alleviate their financial hardship due to the inadequacy of Newstart payment rates. This has potentially serious implications for the sustainability and future of the age pension system.
6.76
The means testing and liquid assets waiting period conditions have negative impacts for all applicants to the JobSeeker Payment. It is especially impacting older jobseekers, as it often forces them to deplete savings they had put aside for retirement. The impacts of these policies on the age pension should be considered and costed. The committee agrees with EveryAge Counts that a comprehensive review of the adequacy of retirement incomes in the current Retirement Income Review must include the JobSeeker Payment.
6.77
The committee recommends the current Retirement Income Review examine as part of its review, the adequacy of the JobSeeker payment and its impact on the Age Pension system and budget, with reference to:
early access to superannuation due to financial hardship experienced by unemployed income support recipients over 55; and
the impact of means testing and the liquid assets waiting period on the retirement savings of unemployed people applying to the JobSeeker Payment.
Single parents
6.78
The committee heard considerable evidence in relation to the high levels of poverty experienced by single parents and their children. Inquiry participants are of the view that the changes to the Parenting Payment (Single) (PPS) and other payments have pushed many single parents, predominantly single mothers, into financial hardship.
6.79
The Western Australia Council of Social Service (WACOSS) submitted that trend data on child poverty rates shows a dramatic increase in child-poverty rates in single-parent households since the introduction of the Welfare to Work program in 2006 and subsequent changes to the PPS indexation and eligibility criteria.
6.80
The National Council of Single Mothers and Their Children Inc. contended that the 'dire consequences' of the changes to PPS are demonstrated by the fact that 39 per cent of children raised in a sole-parent family live in poverty.
6.81
Additionally, the successive changes to Family Tax Benefits (FTB) payment since 2009 have resulted in reduced payments for the poorest families with children.
6.82
The Council of Single Mothers and Their Children Inc. also noted that the changes to child-care subsidies and the phasing out of the Schoolkids Bonus have also negatively impacted low-income families.
Parenting Payments
6.83
Prior to 2013, single parents could access PPS until their youngest child turned sixteen. The policy of transferring sole parents accessing the Parenting Payment onto the lower rate of Newstart when their youngest child turns eight has led to a dramatic increase in single parent family poverty rates from 35 per cent to just under 60 per cent.
6.84
A single mum who participated in the inquiry stressed that the cost of raising a child does not go down when a child turns eight, and added:
Apparently Centrelink believes once your child is eight they are old enough to look after themselves, while you go out and work, which is absolutely ridiculous.
6.85
Good Shepherd Australia New Zealand recommended reinstating PPS for eligible single parents until their youngest child is, at minimum, 12 or 13 years of age.
6.86
The rationale for recommending increasing the age of receipt for PPS to when the youngest child begins high school is that it corresponds to an age when most employed parents no longer need to secure formal or informal child care outside school hours.
Family Tax Benefit
6.87
ACOSS and other submitters submitted that the FTB needs to be urgently reviewed and increased, especially Family Tax Benefit Part B, which supplements the income of single parents whose child is five years or over.
6.88
ACOSS and other submitters recommended that FTB Part B for single-parent families be redefined as Single Parent Supplement, which would be designed to compensate for the higher cost of raising a child alone.
Committee view
6.89
The committee is very concerned with the rate of child poverty in Australia. The recently published Poverty in Australia 2020 reported that 774,000 children under the age of 15 are living below the poverty line. The committee agrees with the analysis of the report that the various changes to the FTB and Parenting Payment (Single) have contributed to this unacceptable trend in child poverty. The Australian Government should adequately fund our social security system to support families in need. The committee believes that eligible single parents should be supported with the costs of raising children until the child leaves the secondary school system.
6.90
The committee recommends the Australian Government immediately review the adequacy of the Parenting Payment (Single) and Family Tax Benefit —Part B to ensure:
eligible single parents receive adequate support to meet the additional costs of raising a child until the child leaves the secondary school system; and
that the total of income support payments an eligible applicant can receive does not allow the applicant to live in poverty.
6.91
The committee recently conducted an inquiry into the ParentNext program and in March 2019 released its report. The committee acknowledges that in addition to discussing the issues around the adequacy of Newstart, inquiry participants expressed grave concerns about the the ParentsNext program and its negative impacts on single parents. The committee is of the view that implementing that report's recommendations would immediately improve the program and its outcomes.
People living in remote, rural and regional areas
6.92
The committee heard throughout the inquiry that the unemployment rate, the poverty rate and reliance on income support payments are higher in remote, rural and regional areas than in metropolitan areas.
6.93
For example, Uniting Vic.Tas noted that while the majority of people who receive Newstart live in capital cities, a greater proportion of working-age people received Newstart in rural and regional areas (6.6 per cent) in comparison to major cities (4.9 per cent).
6.94
The higher number of people living on income support payments in remote, rural and regional Australia is largely due to fewer job opportunities and local labour-market forces.
6.95
Per Capita noted that certain regions of Australia are experiencing high levels of long-term unemployment, particularly in areas affected by the loss of manufacturing jobs, the disruption of primary industries due to drought and climate change, or the offshoring of jobs.
Additional challenges
6.96
In addition to the labour-market issues and barriers to employment discussed in Chapter 5, people living in remote, rural and regional Australia experience unique challenges including:
the lack of affordable housing in some regional areas;
the lack of jobs in regional areas;
the higher cost of living;
the difficulty accessing services due to travel distances and transport costs; and
the cost of maintaining a car, which is so critical in regional areas because of limited public transport.
6.97
Submitters stressed that the costs of living are much higher in remote, rural and regional Australia, mainly due to higher costs for groceries and fuel.
6.98
For example, Ms Deborah Di Natale, CEO at Northern Territory Council of Social Services (NTCOSS), mentioned their work on the cost of living:
One of the things that our cost of living report did was to have a look at a basket of fresh fruit and vegetable. If you were to purchase that at a local Woolies, you would pay something like $538. For the equivalent amount […] if you are in a remote area, is something like $1100. So not only is the cost of living an issue but, if you are living remotely, it is exacerbated.
6.99
The cost of transport and fuel was mentioned on numerous occasions as a key barrier to finding and retaining employment, accessing services and participating in activities.
6.100
A 60-year-old woman on Newstart explained her difficulties with transport costs:
There is no public transport here. The two nearest towns are 40kms and 55kms away from us – so you have to have a car here- which means you have to pay vehicle registration and have the money for petrol to go anywhere e.g. your job service provider every fortnight – ostensibly to search for work.
6.101
The inability to afford essentials is further demonstrated by the fact that people in regional Australia are 33 per cent more likely to have accessed food relief in the past 12 months than people in cities, with 1.5 million people in regional Australia accessing food relief in 2018.
6.102
The Country Women's Association of Australia submitted that the current drought is causing additional underemployment and unemployment in affected areas. It noted that the rate of Farm Household Allowance available to farming families is usually the same as Newstart, and is also inadequate to provide a standard of living in line with community expectations.
Remote Area Allowance
6.103
People on income support payments living in a remote area automatically receive the Remote Area Allowance. As of March 2020, the rate was $18.20 per week for a single person, and $15.60 each for couples, with $7.30 for each dependent child. For a single person, this amounts to an allowance of $946.40 per year.
6.104
It is important to note that people living in a remote area who are not receiving income support payments receive a tax concession offset administered by the Australian Tax Office. For a single person, the tax offset amounts to $338 if living in Zone A (e.g. Alice Springs) or $1173 if living in a Special Area (e.g. Tennant Creek).
6.105
Aboriginal Peak Organisations of the Northern Territory (APO NT) and other submitters are of the view that the Remote Area Allowance is inadequate to address the higher cost of living faced by people living in remote Australia.
6.106
APO NT and other submitters recommended the Remote Area Allowance be increased to better reflect the cost of living in remote and rural Australia.
6.107
Dr Francis Markham, an academic from the ANU, talked about the need to review the allowance and index it appropriately:
… its value should be reviewed, where after it should be indexed to a remote-area measure of inflation. The Remote Area Allowance requires an urgent boost in its value to compensate for its falling value in real terms over the past three decades.
6.108
Central Australian Aboriginal Congress Aboriginal Corporation (CAAC) recommended implementing an additional loading on payments for those in remote and very remote areas to address the significantly higher costs of living in those areas.
Committee view
6.109
As discussed in previous chapters, the negative impacts of current payment rates are profound for all working-age income support recipients. However, because of the lack of job opportunities, higher costs of living and more limited access to services, people living in remote, rural and regional Australia are facing additional challenges that are not taken into account by the current social security system.
6.110
As outlined in Chapter 4, an increase in the JobSeeker and Youth Allowance rates would greatly stimulate local economies and create jobs, especially in areas of high unemployment. Raising the rates would address some of the most pressing issues raised by submitters in relation to people living in remote, rural and regional Australia. However, whilst this is out of the scope of this inquiry, the committee is of the view that existing programs and initiatives aimed at creating regional jobs should be periodically evaluated to ensure they are fit-for-purpose and meeting their objectives.
6.111
The committee is of the view that the Remote Area Allowance as it stands does not mitigate the higher costs of food, fuel and services in remote and rural Australia. The intent of the allowance is lost because of the inadequate rate of the payments. Due to the unique circumstances of people living in remote Australia, the committee sees value in maintaining this additional allowance as long as it is set at an appropriate rate and indexed to a remote-area measure of inflation.
6.112
The committee recommends the Australian Government review the adequacy of the Remote Area Allowance with the view to:
set an adequate rate of payment to address the higher costs of living in remote Australia; and
set a remote-area measure of inflation to be used to index the payment annually.
First Nations Peoples
6.113
The unemployment rate of First Nations Peoples is significantly higher than the rest of the population. When last measured in the 2016 Census, the unemployment rate for First Nations Peoples of working age was 18.4 per cent, 2.7 times the non-Indigenous unemployment rate.
6.114
More than one-in-ten Newstart recipients are First Nations Peoples, as are exactly one-in-five Youth Allowance recipients.
6.115
The Northern Territory (NT) Government reported that in the NT, First Nations People make up about 70 per cent of Newstart recipients and mostly live in remote areas.
6.116
As noted by CAAC, the failure to close the employment gap means First Nations Peoples are increasingly reliant on government income-support.
6.117
Professor Jon Altman and Dr Francis Markham also talked about the long-term reliance on Newstart for First Nations People living in remote communities where there are very few job opportunities:
Newstart cannot be considered a transitional payment despite the persistent insistence of the Australian government of the day, and its adequacy must be assessed in light of this. Rather, since the abolition of the CDEP scheme, Newstart has become the long-term 'destination' for many unemployed Indigenous people.
6.118
The vast majority of submitters focused their comments on the challenges faced by First Nations Peoples living in remote communities, issues related to the CDP program and income management instruments like the Cashless Debit Card.
Community Development Program
6.119
The Community Development Program (CDP) applies to all job seekers in remote Australia on activity-tested support payments.
6.120
The CDP supports approximately 30,000 job seekers in remote Australia. According to the Australian Government, 'it is designed specifically for remote Australia, to take into account its unique social and economic conditions where there are fewer work opportunities available'.
6.121
CDP participants with activity requirements are expected to complete up to 20 hours per week of work-like activities for 48 weeks per year.
6.122
The Australian Government advised the committee that it made improvements to CDP in March 2019, including reducing mutual obligation hours, removing the requirement for job seekers to attend activities daily, and changing payment incentives for CDP providers.
6.123
However, submitters were of the view that the CDP program does not achieve its objectives and is negatively impacting participants.
6.124
Per Capita described the CDP programs as 'disastrous' and pointed out that it has manifestly failed to achieve its objectives.
6.125
NACCHO is of the view that CDP is discriminatory against First Nations Peoples because of its conditions and harsh penalties, which are significantly different to the requirements for jobseekers in other parts of Australia, and which fail to consider 'the complexities of the social determinants and cultural obligations facing Aboriginal and Torres Strait Islander' people.
6.126
Professor Altman and Dr Markham pointed out that the activation requirements, administrative burden and penalties reduce the actual payments received by eligible individuals. This is resulting in many people receiving lower payments than the official Newstart rate.
Breaches and penalties
6.127
The 2018 review of the CDP program commissioned by the Department of Prime Minister and Cabinet found that its participants are the most penalised group of income support recipients. First Nations Peoples CDP participants are 25 times more likely to be penalised than non-remote job seekers, and 50 times more likely to have a penalty imposed on them for 'persistent non-compliance'.
6.128
Submitters expressed grave concerns about the high rates of breaching penalties on remote participants.
6.129
APO NT pointed out that the penalties associated with the CDP 'have also reduced the level and stability of income support for people in already poor communities'.
6.130
Similarly, AMSANT believes CDP is further exacerbating poverty and food insecurity, and increasingly resulting in complete disengagement with the program.
6.131
Inquiry participants recommended the CDP program to be either abolished or substantially reformed.
Proposals to address unemployment and poverty in remote areas
6.132
Submitters put forward proposals to reform or replace the CDP and address unemployment and poverty.
6.133
CAAC stressed the need to redesign Newstart program requirements and systems to ensure they are socially and culturally appropriate and accessible for First Nations Peoples.
The Fair Work Strong Communities Scheme
6.134
APO NT and a coalition of organisations have developed a proposal for a Fair Work Strong Communities Scheme (Scheme), which aims to create real job opportunities in remote communities.
6.135
The proposed Scheme is place-based and community driven, and provides incentives to encourage people into work, training and other activities. The Scheme would require the government to:
fund the creation of 10,500 part-time jobs in local Indigenous organisations across CDP areas;
create training places for young people;
redefine and relax current CDP mutual obligations for those who can work but remain unemployed; and
establish an independent body with an Indigenous led board and possibly regional governance bodies to oversee the program.
6.136
AMSANT suggested reforming CDP in line with the Fair Work Strong Communities Scheme.
Revive the CDEP program
6.137
Some submitters suggested that the former Community Development Employment Projects (CDEP) program worked better for participants and communities.
6.138
For example, Professor Altman and Dr Markham told the committee:
There may be value in revisiting the CDEP scheme that delivered better economic, social and cultural outcomes for those who could not find standard mainstream employment.
6.139
The fundamental difference between the former CDEP program and the current CDP is that CDEP participants were recognised as part-time employees and there was provision for participants to earn top-up wages.
6.140
Professor Altman, at a hearing in Canberra, also explained that services previously provided by CDEP participants are now outsourced:
…the operation of that scheme [CDEP] was devolved to community based organisations, and that generated local jobs, often as CDEP wages and employment top-up, whereas now what we often see is external providers coming into communities and providing those services. So income that could be generated and spent within remote communities is actually exiting those communities both as wages and profits to external providers.
6.141
Additionally, Professor Altman and Dr Markham advised the committee that consideration of some form of universal basic income, especially in situations of failing labour market, should also be explored.
Dropping out of the system
6.142
Submitters expressed grave concerns about people dropping out or not engaging with the social security system.
6.143
Dr Markham explained that whilst the number of First Nations Peoples who are out of work, not studying and not receiving any income support is largely unknown, anecdotal evidence suggests that there are people dropping out of the system.
6.144
NTCOSS submitted that 'the considerable breach rate, in conjunction with negative associations with the Centrelink system, mean that a higher number of people in remote communities are not receiving income support or engaging with the social security system'.
6.145
Similarly, APO NT contended that the CDP's punitive conditions have led people to leave, or become excluded from the income support system.
6.146
MoneyMob Talkabout, which operate a money support hub in the APY Lands reported:
Anecdotally, we regularly hear of significant numbers of people in the remote communities we service disengaging with the income support system. People say that the system is too complex, young people do not understand it and do not want to or cannot comply with it.
6.147
NTCOSS is of the view that Centrelink access issues are also contributing to people not engaging with the system. Access issues cited by NTCOSS included:
limited physical access to Centrelink offices for those living outside urban areas;
limited access to Centrelink's online system due to low levels of digital literacy and / or access to internet;
inability to access appropriate work-capacity assessments; and
limited access to interpreters.
6.148
Dr Francis Markham is of the view that further research into causes, prevalence and consequences of individuals dropping out of the income support system is urgently needed.
Committee view
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The social security system continues to fail First Nations Peoples, especially in remote communities where there are extremely limited or simply no job opportunities. Instead of supporting people to find work, the system has increasingly become punitive with the expectations that it will incentivise people to find work, irrespective of local and regional labour-market circumstances. Not only is the maximum rate of Newstart inadequate but many CDP participants get even lower payments because of the harsh penalties associated with compliance requirements.
CDP program
6.150
The CDP program has largely failed to meet its overall objective. Since it began in 2015, less than a third of its participants stayed in a job for more than six months. Based on the evidence received during this inquiry, the committee is of the view that the findings of the inquiry into the Appropriateness and effectiveness of the objectives, design, implementation and evaluation of the Community Development Program (CDP) conducted in 2017 by the References Committee on Finance and Public Administration (F&PA) are still relevant. The committee acknowledges that changes were made to the program in March 2019. However these changes do not address all the concerns about the program. The committee is of the view that consideration should be given to replacing the CDP program with a new program focused on local economic development with the objective of getting participants into real jobs at adequate pay rate levels, as recommended by APONT. The new program's governance arrangements should ensure that communities have input and control over the design and delivery of the program.
6.151
The committee is concerned with the various compliance requirements and income management measures that are in place for remote First Nations Peoples income support recipients. The committee is cognisant that income management measures such as the Basics Card and Cashless Debit Card have had negative impacts on First Nations people. The committee is of the view that these matters should be furthered explored either as part of the proposed inquiry into the mutual obligation requirements for working-age income support recipients and the adequacy and effectiveness of employment programs (Recommendation 13 in Chapter 5) or a stand-alone inquiry.
Disengagement with the social security system
6.152
The committee agrees with submitters that limited access to internet, lack of information available in First Nations languages and a lack of outreach and culturally appropriate programs are contributing to people not engaging with the social security system. The committee received evidence that a growing number of First Nations Peoples living in remote communities have dropped out of the social security system or never engaged with it. While the number of people in this situation is unknown, the negative impacts are profound for these individuals, their families and community as it pushes families into further poverty and disadvantage. The causes of this disengagement are complex and need to be better understood.
6.153
The committee recommends the National Indigenous Australians Agency commission a study into the prevalence, causes and consequences of First Nations Peoples living in remote communities not taking up or dropping out of the social security system.
Young people
6.154
Nearly one in three young people are unemployed or underemployed, with only half of 25- year-olds in full-time work.
6.155
The full-time employment rate for 15 to 24-year-olds has dropped from 53 percent in 1980 to 26 per cent in 2018.
6.156
In addition to the barriers to employment discussed in chapter 5, young people face specific barriers to participating in the labour market, including:
decreasing availability of entry-level jobs;
employer reluctance to employ candidates without experience;
difficulty transitioning from education to work;
lack of informal networks; and
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As described in Chapter 1, eligible unemployed young people under 22 years of age receive a lower payment on Youth Allowance than those on Newstart, regardless of their living arrangements and family support. The maximum rate for a single person living out of home is $462.50 per fortnight.
6.158
Submitters raised concerns about the fact that the rate of Youth Allowance is lower than Newstart despite housing and other essential living costs not varying with age.
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This is resulting in the rates of poverty being higher for people receiving Youth Allowance than for any other income support recipients.
Outdated policy
6.160
Submitters contented that the lower level of Youth Allowance reflects an outdated policy view that young people can rely on financial support from their parents, even if a young person has been assessed as financially independent.
6.161
For example, ACOSS stated:
Lower maximum rates for Youth Allowance are based on the false assumption that all those receiving it can supplement their income with parental support or part-time employment.
6.162
Submitters strongly advocated for a review of the rate of Youth Allowance that would see payments for young people at the same level as those for people over 22-years of age. They also called for a review and an increase of the payment rates for Newstart.
Youth homelessness
6.163
The negative impacts experienced by people receiving Newstart and the Youth Allowance have been discussed throughout the report. However, as Youth Allowance is even lower than Newstart, this contributes to young people being more at risk of homelessness than any other cohort.
6.164
According to Uniting Vic.Tas, young people make up 24 per cent of the homeless population in Australia. The Victorian Government stated that there are around 40,000 young people in Australia who are homeless.
6.165
For example, Mission Australia told the story of a young man aged 18 from regional Victoria receiving Youth Allowance:
He has been couch surfing at friends' places and staying in emergency accommodation. […] Being on Youth Allowance, he cannot afford to secure accommodation […] He is worried that he will be judged by employers for a range of reasons including not having a permanent address.
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Colony 47 conducted a survey of young Tasmanians aged between 15 and 24 years of age receiving Youth Allowance or Newstart payments and found that 46 per cent of respondents said they were at risk of homelessness because of their financial situation.
Transition from out-of-home care (OOHC)
6.167
Many children who have been in out-of-home care (OOHC) up to the age of 18 become reliant on Youth Allowance to live once they leave care.
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This cohort is at increased risk of experiencing homelessness within 12 months of leaving care. Submitters reported that over a third of young people leaving OOHC experience homelessness during their first year of independence.
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CREATE pointed out that many young people leaving OOHC find it difficult to engage with Centrelink and other services. A young person reported her experience:
Applying for Centrelink Youth Allowance is very lengthy, the questions don't allow you to reflect appropriately your experience especially being in OOHC, the process of obtaining and maintaining payments is not appropriately translated to young people.
Barriers to access Centrelink services
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Submitters identified issues with accessing Centrelink services for young people who are homeless. This can result in young people falling through the cracks or disengaging with the system.
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Additionally, many young homeless people face additional challenges to meet mutual obligation requirements, and may be financially penalised because of breach penalties.
6.172
Submitters recommended Centrelink employ more social workers to assist vulnerable people to navigate the social security system and to support them to access the payments they are entitled to.
Committee view
6.173
The committee agrees that there needs to be equity between the Youth Allowance payment rate for young people who live independently and the JobSeeker Payment. Young people living independently face the same expenses as those on the JobSeeker Payment. The committee believes that the current policy of lower payment rates for young people under 22 years of age has contributed to the rise of youth homelessness.
6.174
The committee recommends the Department of Social Services undertake a review of the adequacy of the Youth Allowance policy criteria and rates of payment to ensure recipients do not live in poverty.
6.175
The committee is concerned by the lack of support to engage and navigate the social security system for vulnerable young people, including young people leaving out-of-home care and young people experiencing homelessness. The committee agrees that there is need for additional case workers to assist vulnerable young people in their dealings with Centrelink services.
6.176
The committee recommends Services Australia ensure that vulnerable young people are systematically assigned a caseworker to assist them with their applications for income support payments and connect them with the relevant services that can provide further assistance.