2017-2018 Federal Budget Expert Analysis - Social Services

Key points

  • Compliance framework introduced for welfare recipients

  • $263 million to assist parents of young children to re-enter the work force

  • Single Jobseeker Payment to replace seven existing payments

  • Childcare subsidy to be capped for high income families

 
The Government is introducing a new Jobseeker Compliance Framework (the Framework) that strengthens penalties for deliberate non-compliance while providing additional help for genuine job seekers to meet their requirements.

The new Framework will include a Personal Responsibility Phase where each failure without a reasonable excuse will result in payment suspension until re-engagement, and accrual of demerit points. Individuals who accrue four demerits in six months will enter a three-strike Intensive Compliance Phase, in which they will face escalating penalties.

They will:

  • lose 50 per cent of their fortnightly payment for their first strike without a reasonable excuse;

  • lose 100 per cent of their fortnightly payment for their second strike; and

  • have their payment cancelled for four weeks for their third strike.

Individualised assessments will be undertaken by providers and the Department of Human Services before any financial penalties are incurred for not meeting obligations. These assessments will take into account individual circumstances to ensure that people with genuine issues are not unfairly penalised.

For new parents looking to return to work, $263 million will be added to the ParentsNext program which provides parents of young children tailored support to assist their return to work. Participants in the ParentsNext program will receive personalised assistance, including advice on relevant education and qualifications and training to improve numeracy & financial literacy.

Welfare payments are to be streamlined beginning 20 March 2020, with a new JobSeeker Payment replacing or consolidating seven existing payments, namely Newstart Allowance, Sickness Allowance, Wife Pension, Partner Allowance, Bereavement Allowance, Widow B Pension and Widow Allowance.

For families with a combined income over $350,000 per annum the childcare subsidy will no longer be available. The upper income threshold will apply from 1 July 2018 and will be indexed annually by CPI from 1 July 2018.

LexisNexis Capital Monitor Summary:

The social services portfolio is streamlining welfare payments, along similar lines to those pioneered by the UK's Conservative Party. From 2020, a new Jobseeker Payment will replace or consolidate seven existing payments: Newstart Allowance, Sickness Allowance, Wife Pension, Partner Allowance, Bereavement Allowance, Widow B Pension and Widow Allowance. The UK's consolidation of welfare payments was decried by social services organisations as unfair - this Budget's measures may meet with a similar reaction here.