Robbing the Poorest- Australian Welfare 2006

You can read the notes from my April 2006 talk about the July 2006 Welfare laws at the Sydney Shove website.

In today's news the Australian charity organisations have balked at the Federal Government telling them that 18 000 people will have their payments stopped for 8 weeks from July 1st, and that the charities should be looking after these people the Howard regime is starving.

Meanwhile Howard's favourite advertising company is getting a $9 million hand-out to advertise the "Work To Death" policy for disabled people. This isn't about informing people on the Disability Support Pension, who will be sent a letter, but to comfort the voting public about how mean we are as a nation, as we starve disadvantaged people to death instead of helping them.

The Australian Federation of Homeless Organisations (AFHO) warned that the changes could force up to 14,000 people into homelessness.

Robbing the poorest - Australian Welfare laws from July 2006

by Ian Woolf

There have always been people who cannot participate in the workforce
and who don't have enough capital to pay for the necessities of life
without asking for help. People who have their productive time taken up
in a project that is not financially rewarded. Examples would be caring
for a child or someone disabled by illness or injury, or people whose
productive time is taken up managing their illness or injury. Or people
who wish to create art. There are also people who are able bodied and
not in a carer's role who have skill sets that are not in demand by
employers. The Safety Net was conceived as a way that would allow all of
these people to live a good life.

The poverty line was established at $62.70 per week by the Henderson poverty enquiry in 1973. The poverty line was determined by this Federal enquiry to be the minimum required to pay for basic needs such as housing, groceries, utilities and medical costs. This figure has been kept to the present day as the amount that a pensioner is allowed to earn before losing benefits, and how much an allowee can earn per fortnight before losing benefits. It is projected every quarter by the Melbourne Institute of Applied Economic and Social Research. For the December 2005 quarter the relative poverty line was $329 for a single adult. By comparison, the maximum Newstart Allowance including rent assistance is $75 below, and the maximum pension is $35 per week below the poverty line. If someone is transferred from the pension to Newstart they lose $40 week. Couples with a child are paid $11 below the relative poverty line, and single parents with 1 child are paid $52 below the poverty line. If instead you take the Australian Bureau of statistics Consumer Price Index, living cost $100 more at $428 per week for a single adult.

At present, if your employer ends your contract by firing you, then you are supported by the Safety Net of Unemployment benefits. However if you, as the equal other party to the contract choose to terminate your contract for any reason, then you are NOT supported by the safety Net and will not qualify for unemployment benefits for a waiting period of 8 weeks. If you are not someone who has had the time and opportunity to accumulate some wealth to tide you over until you find a new job, then you have no choice but to stay in the job. You cannot afford to quit, or you will die of starvation. When a group of people are not able to quit their jobs without threat of death, we call those people "slaves". You may think that the Prime Minister is helping the workers into the Safety Net by making it easier for employers to fire them, but its not the case. Centrelink can make you wait the 8 weeks without income if you have been fired for "misconduct" according to your employer. Thats two months without any money.

Is this just rewarding people who have been smart enough and worked long enough in high enough paying jobs to have savings? If you have "liquid assets" over $2500, then you have to wait an extra week over the 8 weeks for every thousand dollars in the bank, until Centrelink have bled you dry. How much will this save the government? It will COST them an extra $16 billion dollars, which is equal to the entire cost of the welfare system. Lowering payments is literally going to cost twice as much.

You can't quit, and you can't refuse any work contract unless there is a bidding war for your services.

I will be focusing more on the Disability Support Pension because I know
it better than all the other allowances. The DSP work limit was
originally placed at 30 hours or less per week. The principle was that
less than 30 hours per week of work would not pay for basic needs, and
part time work is very competitive. This will be arbitrarily cut in half
to 15 hours per week.

The Government has targeted people with disabilities and single parents for the latest round of income reduction. There is no plan to either prevent disabilities occurring, or to help disabled people improve their health. Nor is there any extra child care for single parents. So the cause of their situation won't actually be dealt with. Peter Costello has been remarking for months about the increase in people who qualify for the pension. Many people have spread the idea that it is easier to get a disability pension under the Howard government. You need to convince a clerk that you have 20 points on the impairment tables and that you won't improve within two years. You have to be severely disabled, not, as has been suggested by Mr Costello, just have a bad back. If your only problem was a back condition, then you would have to be in almost constant pain or be unable to sit or move around properly to get DSP. You are allowed to offer a medical report when you apply or are re-assessed, but the clerks don't have to respect them, and they don't have to consult a doctor to reject you. There is a culture within Centrelink of being at war with the customers. Senior executives phone the front desk to ask how things are at the front line. The Australian Council of Social Service has released a document entitled "Ten Myths and facts about the Disability Support Pension." "The DSP is easy to get is myth number one.

What could the other reasons be? The figures show that there is a terrible health problem that is causing more and more Australians to qualify for the Disability Support pension -- aging in people over 45 and injuries in people under 25. The increase of people on the DSP has been in women aged 45 to 65, and corresponds to other payments such as he Wife Pension, Widow's Pension and the Age Pension for women 60-65 years old being shut down, so that more women with disabilities applied for the DSP. The Sydney Morning Herald has been running a feature series this week about death and injury in the workplace. Demands for higher productivity from employers also mean that people with disabilities who were able to mask their disability or be accommadated in the workplace could no longer measure up to the higher standards. Over half of people going onto Disability Support Pension are coming from other income support payments with the main payments being Newstart or Youth Allowance (37%), Parenting Payments (5%) and Sickness Allowance (4%)

According to the SMH using the national workers compensation database, more than 300 000 Australians under 25 have suffered work related injuries or illnesses in the last ten years. this is almost equal to the number of Australians killed and wounded during both World wars. From WorkCover's figures, more than 7000 young workers were permanently disabled at work between 1998 and 2004. If you were to feel horrified that we are working young people to death, how would you feel about the report that in the last decade, over 500 workers under 25 were killed on their first job?

Another obstacle to disabled people to be introduced means that a person who is unable to work 15 hours a week, would nevertheless only be eligible for DSP if their impairment also prevented them from undertaking a "training activity" that would lead to a capacity to work 15 or more hours a week within two years, according to a Centrelink clerk. In deciding whether a person is capable of undertaking a "training activity", the legislation does not require Centrelink to take into account the availability of the training. In other words, as long as a person could do a "training activity" if there was one, then even if there isn't one available to them, they will not qualify for DSP.

Is everyone up to speed with the Family Benefits system? If you are married with children, and one partner chooses not to work, then your welfare is not means tested. Anyone who falls outside of this ideal family unit is subject to tests on their assets and income. If you are married and breed, then the Government will give you a guaranteed annual income, regardless of your wealth. Not enough to live on, but nontheless an income. The lack of means testing has been vigorously defended as being too expensive to implement. Once the principle has been used for married parents, why should it be such a big stretch to apply it to single parents, the disabled, and then everybody else? Peter Costello recently said on Radio National "In fact, what it shows is that families with two kids on average incomes don't pay any tax because the family tax benefit nets out their complete liability." This average income is $60 000. They pay $15000, get $11000 back in family tax benefits and 4000 back in Child benefits. Net tax is zero. People with below average incomes do pay tax, and if they are receiving any welfare payments, then they lose welfare for their net income, in addition to the tax they pay. You could be losing 104% of your hourly rate to hurt yourself if you are on a disability pension after you've paid tax and then had your welfare payment reduced . It sounds more like punishment than reward to me. That's 17 cents tax, 60 cents payment reduction, 27 cents Centrelink debt withholdings, 25 cents public housing rent increase. Of course, as a part-timer you would be taxed as if you were full-time, and then required to claim back the money at the end of the year, so you would be giving the government an interest-free loan at the same time.

The new penalties for activity tested payments, which is everybody
except for DSP and Seniors, will be an immediate 8 week suspension, or
an indefinite suspension until Centrelink decides you have complied.
Previously you were given some slack, and had three strikes with lesser
penalties before you were punished with starvation.

The proposed package will:

• impose waiting periods of up to 13 weeks before getting onto Newstart Allowance, stripping savings and clawing back Government family payments and bonuses;

• cut basic payments by up to $46 per week, making it harder to
  afford housing and the costs of job search;

• impose six substantial workforce participation barriers for those
  who may get work, in the form of 17 cents tax, 60 cents income
  test, 27 cents Centrelink debt withholdings, 25 cents public
  housing rent increases ,combined with reduced income thresholds
  and indexation provisions and no allowance for additional children;

• deny pension payments to thousands of parents who will not be able
  to work because of the severe disabilities of the children in
  their care;

• deny pension payments to foster parents, even where the youngest
  child is under 6;

• prevent parents from breaking out of long-term poverty through
  full-time study by forcing them onto Austudy Payment at a weekly
  payment cut of up to $155;

• 
  impose a severe new compliance regime that will cut payments
  completely for eight weeks at a time -- a loss of some $1,800; and

• 
  punish many sole parents who take a job or who reconcile with
  their ex-husband for more than 12 weeks by forcing them to return
  to the lower Newstart Allowance if their efforts fail.
  

The assets test will become a hundred times more strict. Under the old
system, a single person was allowed savings of up to $250 000 before
they were too wealthy for benefits. From July 1^st this will be reduced
to $2500. For every $1000 over this amount, people will be forced to
wait another week without government income, past the 8 week waiting
period. $5000 in the bank means you wait 13 weeks. You get to bleed away
any emergency funds that you would have used to pay for medical bills,
or major appliances failing or any of the other long term costs of
living that government payments don't allow for. Poor people are not
entitled to dentistry.

The new welfare laws will also cut people off for refusing to take any
job, with the explicit exemption of sex work. The reason for this is
that otherwise people would be legally required to take up prostitution
if no other work was offered. This was highlighted in Germany, because
this exemption wasn't put in place. Women refusing to work in a brothel
were threatened with losing their unemployment benefits, after
prostitution was legalised.

According to the ABS nine out of ten single parents are women; most are separated or divorced, and aged in their thirties and forties, with one or two children She is on parenting payment single for approximately 3 to 4 years, before gaining skills and re-entering the workforce. Many become professionals who service the community in health and education."

Ten years ago nobody would have dreamed of robbing a disabled person of their right to enjoy life as best they can, but now over-worked productivity obsessed people envy their freedom from wage slavery. Huge amounts of money, time and personnel are spent to make sure that people who ask for help meet some restrictive criteria and have proved their worth by jumping through administrative hoops of paperwork and interviews. Having accepted these people as worthy poor, more money is spent policing every aspect of their life, not merely their finances, but also their sex life -- everything is scrutinized. If someone doesn't measure up, or the system glitches, then the person is cast out to starve. This is the Australian welfare system. Instead of wasting resources on a complex two-tiered system with surveillance and punishments, give the money to everyone who asks for it. People are valuable resources as humans, whether they earn money for an employer or not. We have a budget surplus because technology is amplifying productivity exponentially, and will continue to generate higher and higher amounts of real wealth. There IS a surplus, why are we spending billions to tighten our belts and save millions by robbing the poorest people in our society?

References:

AM
- Costello under pressure to reform tax system

New
Analysis Claims Disincentives Undermine 'Welfare To Work'

Changes
to Disability Support Pension

Young
sacrificed at work

Young
singles left out of the welfare loop

Parenting
payment activity agreements

Govt
rules out family tax changes

Poverty Lines: Australia

About the author: Ian Woolf lives in Sydney, has a degree in Applied Science, worked as a solar astronomer, software engineer, systems programmer, webmaster, research assistant, Cisco CCNA tutor, Physics laboratory demonstrator, Computational Theory lecturer, and subject coordinator; while changing his career to freelance writing and broadcasting. Listen to Ian on the Diffusion radio science show on radio 2SER 107.3FM Monday at 6:30pm in Sydney or streaming audio on www.2ser.com, or listen to the Diffusion podcasts. You should follow me on twitter, here

Posted by iwoolf at June 5, 2006 5:15 PM | TrackBack