Crisis affecting one in four over-55s

Australia’s peak welfare group is pushing for a $400 per month rise to Newstart payments.

Currently, Newstart recipients live on up to $270 a week.

The Australian Council of Social Service (ACOSS) says that the basic weekly cost of living is more than $460.

It is asking the government to consider increasing payments by $95 a week to help them cope with the rapidly rising cost of living.

And it’s not just young people who are affected by low payments, as around one in four Newstart recipients are over 55.

“While retirement incomes have improved since the rise in the Age Pension, many older people under the pension age are finding themselves out of paid work, often due to age discrimination,” said ACOSS chief Dr Cassandra Goldie. “The fastest growing group of people on Newstart is those aged over 55, particularly women, and they are struggling to get by on the paltry rate of $40 a day, which must be urgently increased.

“People struggling on social security know better than most about budgeting and don’t need the federal government to teach them. $40 a day is simply not enough to get by.

“Our survey of people on Newstart found people were regularly having to skip meals and rely on cheap foods such as tinned food and porridge. People use electricity extremely sparingly – they report showering only once a week and only buying food that doesn’t require refrigeration.”

However, the government says there is no need to increase Newstart because other forms of support are available. And while it concedes that rising living costs are putting the unemployed at a huge disadvantage, increasing the Newstart base rate would cost taxpayers billions.

It also argues that Newstart recipients can get other benefits, such as utility concessions.

And yet, the government seems content to keep looking after the top end of town. In November last year, a government report on the state of the nation’s retirement income system found that Australia’s wealthiest are given twice as much financial support as those on the lowest incomes.

ACOSS argues that the government could find the money to fund a Newstart boost, pointing out that the cashless welfare system it’s trying to push across the nation already costs thousands per person to administer. Most of this money goes to big banks. ACOSS also argues that the government could find tens of millions of dollars if it would only review the inequitable tax breaks for super contributions.

“People in paid work have long gone without pay rises and those looking for paid work are being trapped in poverty, without a real increase to Newstart in 25 years and with unemployment rising,” said ACOSS in a statement.

“[There is a] case for a well targeted fiscal stimulus package including an immediate boost to Newstart, investment in social housing construction and energy efficiency. Tax cuts and investment incentives are much less effective in boosting the economy per dollar spent and do little to assist those on the lowest incomes.

“We have been calling for Newstart to be raised for over a decade and in that time the cost of essentials has increased dramatically. In light of steep increases in housing and other essentials, we have updated our call for Newstart to be increased by $95 per week.

“Raising the rate by $95 per week will get Newstart working by allowing people to cover the basics, instead of being forced to skip meals, sleep rough and miss medication, which makes finding paid work even harder. The benefits of increasing Newstart would be felt in the economy immediately, particularly in regional and rural areas, including those affected by fires.”

The government remains steadfast in its defence of stagnant Newstart rates.

“I think what we should be focusing on is the one in three who have become long-term recipients of Newstart,” said MP David Littleproud.

“How do we engage them to get back into the workforce?”

Do you think Newstart should be raised? Is the government remiss in maintaining tax breaks for the wealthy over redirecting funds to the poor?

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Related articles:
Lift Newstart and the Age Pension
Why you’ve got Newstart wrong
Tax changes for older workers

Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

Leave a Reply

Is super a saviour or a scam?

Another disease with no simple fix