For some Australians, entering a relationship can have devastating consequences on their income, savings and retirement plans.
Amidst a mounting cost-of-living crisis, there is a growing chorus of voices urging the federal government to reconsider the partner income assessment conducted by Centrelink for individuals relying on welfare benefits.
A recent petition, aimed at ending the partner income assessment for disability support pension recipients, has gained significant traction and is awaiting a response from the Department of Social Services.
One individual, referred to as Laura, speaking to The West Australian, reveals that her partner’s earnings caused a drastic reduction in her carers’ payment, leaving her unable to afford potentially life-saving medical tests.
“I have MRI screenings because I’ve got a high risk of pancreatic cancer due to family history,” she said.
“That costs us, like, $500 a year. I’m no longer doing that because I can’t afford it.”
As a dedicated caregiver to four adopted children with various developmental disabilities, Laura’s carer’s payment is heavily affected by her husband’s income.
If she were single, her payment would be around $800 per fortnight, but instead, she receives only a quarter of that amount. The means and income testing procedures make Laura feel undervalued and dehumanised, as she struggles to cover the rising cost-of-living expenses.
Her partner, who used to have a high-earning blue-collar job, recently became a security guard to be able to spend more time helping Laura care for the children.
“He dropped his income by about a third in order to be more available,” she said.
Despite the pay cut, her husband’s earnings still heavily affect Laura’s ability to rely on the carer’s payment.
“On average, if he does a 48-hour week and 12-hour shifts, he makes about $1600 a week,” Laura said. “My carer’s payment then drops down to about $100 a week.”
The impact of partner income assessment on carers such as Laura goes beyond financial constraints. She feels undervalued. “What it means to me is that they don’t value what I do as a carer and that I’m not an individual,” she said.
Being a full-time carer leaves her unable to seek additional income, resulting in the depletion of their savings.
Moreover, the absence of accruing superannuation poses another concern. Laura acknowledges that, at her age, she should be building a solid financial foundation for the future. However, due to the limitations imposed by partner income assessment, she anticipates having minimal superannuation when she reaches retirement age.
Services Australia states that couples living together and receiving a pension experience reductions in their welfare support once their combined income exceeds $336 per fortnight. Pensions gradually decrease by 50 cents for each additional dollar earned beyond this threshold.
Highlighting the financial strain further, the median rent in Perth, as reported by The West Australian in May, stands at $550 per week. This adds to the growing challenges faced by welfare recipients, exacerbating their struggle to meet basic living expenses.
Emma Downing, 32 a resident of Bunbury, shares a similar sentiment, describing the experience of relying on her partner’s income as akin to asking for “pocket money”. Emma’s disability means she can only work limited hours, and her income primarily goes toward medical costs, leaving her dependent on her partner for other expenses. This dependency can create a power dynamic that can undermine a sense of financial freedom and individuality.
Shared income within a household
The partner income assessment is based on the assumption that income and assets are shared within a household. However, this assumption fails to consider situations where resources are withheld or controlled by one partner, potentially exacerbating financial abuse.
Experts, such as Associate Professor Helen Hodgson from Curtin University, suggest that finding a balance between financial autonomy and appropriate support for high-income households is crucial. Means testing should take into account household circumstances and the number of dependants to accurately determine an individual’s need for welfare assistance.
Means testing grapples with striking a balance between promoting financial independence and avoiding unnecessary assistance to households with high incomes.
“Speaking from the perspective of gender economics, we always say people need to be self-sufficient,” she said. “You do have this dilemma where you can ask, ‘what happens if one person withholds access to those resources from the other party?’.”
Prof. Hodgson said the social security system was about need. “When you determine need, then you’re looking at household circumstances,” she said.
“That’s why a lot of the means testing takes into account the number of children you have, because it says, ‘well, if you have more children then your costs are going to be higher than if you are just a couple without children’.”
A previous petition, presented to parliament in 2022, argued that partner income assessments could contribute to the difficulties those who experience financial abuse have in trying to leave a relationship.
“Partner income being used to affect an individual’s welfare status is dangerous,” it read. “It has been pointed out consistently by domestic violence (advocates) as a reason people are unable to escape from abuse.”
However, social services minister Amanda Rishworth supported the system, stating that social security payments are designed based on the assumption that couples pool their resources for mutual benefit.
“Couples generally share their expenses, such as various utilities including electricity, gas, internet and water,” she said.
“Accordingly, the income of each member of a couple is assessed for the purposes of the social security income test.”
The Department of Social Services has yet to provide a response to the latest petition.
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Also read: Centrelink Q&A: How will Centrelink assess my relationship status?