Both payments woefully inadequate

With news that an Age Pension increase may be on the way, but no such joy for Newstart recipients, YourLifeChoices sought your thoughts on which one should be given priority.

While 78 per cent of those surveyed in our Age Pension or Newstart increase: which one should be a priority? flash poll said that the Newstart base rate should be increased, only 42 per cent said that should be prioritised over raising the Age Pension base rate.

Eighty-six per cent of those surveyed also said that the Age Pension base rate should be increased. When asked if they would give up an Age Pension increase for a Newstart increase, 52 per cent said ‘no’, 28 per cent said ‘yes’ and 21 per cent said they were unsure.

The survey also revealed that 25 per cent of respondents had been or are receiving Newstart payments.

Currently, Newstart recipients have to live on around $272 a week on average. When asked if this was enough for our members to live on, 87 per cent said ‘no’.

A report released on Friday by the Australian Council of Social Services (ACOSS) revealed that all of the crossbenchers of the Lower House of Federal Parliament and key Senate crossbenchers support an increase to Newstart.

“The diverse crossbench’s unity on increasing Newstart confirms just how out of touch the major parties are on this issue, as does polling which finds 68 per cent of the community agrees we must increase Newstart,” said ACOSS chief executive Cassandra Goldie.

“Most people receiving Newstart live below the poverty line. It is very difficult to look for a job when you don’t know where your next meal is coming from or how to put food on the table for your kids. For years, people have been telling their story, trying to get the Federal Government to hear them.

“It’s time for the Coalition Government to listen, and most importantly to act now to increase Newstart by $75 per week. 

“The rate of Newstart has not been increased in real terms for 24 years, and since 2014, the Coalition Government has been trying to cut the payment even further. While the Labor Opposition has promised a review of Newstart should it win government, people cannot afford to keep waiting in poverty for politicians to finally act.

“We strongly call on the major parties to work together to urgently steer bipartisan legislation to raise the rate of Newstart and Youth Allowance through the Australian Parliament before the holiday season.

“It’s time politicians righted this long-standing wrong and delivered social justice to people on the very lowest incomes in our wealthy country.

“Many of us are a job loss or a relationship break down away from relying on our social security safety net. We can afford a decent social security safety net and universal access to services by ensuring that businesses and individuals contribute their fair share of tax,” she said.

Chief economist at Deloitte Access Economics Chris Richardson agrees that raising the welfare allowance has to become a priority.

“In Australia, we have one of the highest minimum wages in the world and relative to that one of the lowest unemployment benefits in the world,” said Mr Richardson.

He says adding $10 a day to the existing base rate of unemployment benefits would cost $3.3 billion but would create a bigger economy.

“Of that direct cost of $3.3 billion, because it’s going to people who will basically spend every cent … it tends to have a bigger boost to the size of the economy than some other things do,” he said.

Opinion:  Overwhelming support for over 55s ‘transition’ payment
While older Australians certainly do support increasing Newstart payments, there is a prevailing sentiment that by doing so, the Government would essentially be giving handouts to younger people not making a good enough go of it. So, we asked if it might be a good idea to create a new form of ‘transition’ payment that helps unemployed people over 55. This idea received massive support, with 82 per cent agreeing with the idea.

“Newstart seems cruel for people who cannot find a job and have tried with no success. Maybe age of unemployed is relevant as older ones would be in more distress than a teenager or very young one who can stay home with mum and dad. One size may not fit all. Some older workers who are unemployed are in limbo and using up their savings and super in their fifties and sixties. An employer does not have to state that age is an impediment to getting the job they simply don’t choose an older person. Single pensioners who are renting seem to be struggling, so again individual circumstances need to be considered for elderly people,” wrote Paddington.

“Yes, I agree. And finding myself in the situation – too young for the pension, too old to find a new job – I know quite some people who are really struggling on Newstart. What many people out there don’t know is: To be eligible for Newstart when you are over 55, you either have to apply for 20(!) jobs per fortnight, which is very frustrating, or you can work 30 hours per fortnight as a volunteer for organisations/charities of your choice, which can be very rewarding personally, but sadly not financially. Most volunteers are on some sort of Centrelink payments. Imagine Australia without volunteers!” wrote Ms Logik.

“Both Newstart and Pensions (Age and Disability) are woefully inadequate. I chose to prioritise the Pension as pensioners have no chance of changing their circumstances. For even those lucky enough to have acquired substantial superannuation during their working lives, the only way is down, never up. On the other hand, a young person has something very important on their side – time – time to study, time to get a job and time to save for their retirements. They will receive superannuation all their working lives whereas those now retired received it only since 1992, meaning that current retirees have had some two decades less of superannuation than today’s workers,” wrote CarolAT.

Some YourLifeChoices members feel that our politicians are far too removed to be making decisions about what is enough money to live on at any age.

“You cannot live off an Age Pension if you have rent to pay, food to buy, bills to pay, run a car and have a very, very modest lifestyle even without travel involved. I feel so sorry for people on Newstart allowance. It’s disgraceful, what the Government thinks is enough to live on. Most people on NewStart allowance don’t eat properly. They live on rice alone. Which is very unhealthy. While politicians live off an income of $4000 a week. They have no clue what these people go through to make ends meet and they never meet impossible to live off $272 week. I need $600 a week to live, to pay rent, buy good food, pay my bills and run my car. I don’t smoke, drink, or gamble and have no social life, other than very occasionally I go to an $8 movie,” wrote Enneagram 8.

Sixty-eight per cent of YourLifeChoices members believe Newstart should be benchmarked in the same way as the Age Pension.

“There is no reason why Newstart and the Age Pension shouldn’t be identical. The living costs would be the same. In fact, it could be argued that Newstart should be higher to account for the additional expenses of looking for work, which an aged pensioner need not worry about. Having said that, the Age Pension should be much higher and at least 75 per cent of the minimum wage. The Age Pension should be the benchmark for all social security,” wrote Maelcolium.

“Both payments need to be raised and Newstart should have a rate for those over 55 who have worked their entire lives and cannot find employment, which is comparable to the pension,” wrote MareeIrene.

What do you think? Should the Government seriously look into creating a new form of payment for over 55s who don’t yet qualify for the Age Pension?

Related articles:
Age Pension increases – September 2018
Age Pension increases inadequate
Age Pension too complicated

Written by Leon Della Bosca

Leon Della Bosca has worked in publishing and media in one form or another for around 25 years. He's a voracious reader, word spinner and art, writing, design, painting, drawing, travel and photography enthusiast. You'll often find him roaming through galleries or exploring the streets of his beloved Melbourne and surrounding suburbs, sketchpad or notebook in hand, smiling.


Age Pension increases: 20 September 2018

How much more Age Pension will you receive?

‘Inadequate’ pension rises will buy an extra coffee a week

Get the politics out of the pension, urges Benevolent Society campaigner.