For many years the St Vincent de Paul Society has been advocating for increases in government allowances, particularly the Newstart Allowance. At the National Press Club in December last year, the then Federal Minister for Social Security, the Hon Christian Porter, said that he was convinced that the Allowances were adequate and that advocates often ignored the other payments that Newstart recipients were entitled to. This year, the new Minister for Social Security, the Hon Dan Tehan claimed on a number of occasions that “99 percent (of Newstart recipients) receive additional payments and supplements” as justification for the low base payment.

This briefing paper examines both the rates of allowances as well as the other financial benefits a recipient might be entitled to. We conclude that the rates of allowances are indeed still grossly inadequate, even when these other payments and supplements are factored in.

Newstart Allowance: The rate and the extras

The two main extra payments received by Newstart recipients are Commonwealth Rent Assistance and the Energy Supplement. For simplicity, we will examine only the rate for a single person under 60 years of age, living independently, without dependants. The maximum rate of benefit is used in each instance.

 

Newstart

Commonwealth Rent Assistance

Energy Supplement

Total

Henderson Poverty Line Sept Quarter 2017

Rate per fortnight

$545.80

$134.80

$8.80

$689.40

$1,023.50

Rate per day

$38.99

$9.63

$0.63c

$49.25

$73.11

 

To receive the maximum rate of Commonwealth Rent Assistance you would need to be paying $299.93 a fortnight in rent, which means that you would still have to pay $165.13 out of the Newstart Allowance for rent or more if your rent was higher. This would leave you $389.47 per fortnight for other living expenses or $27.82 per day, less if your rent was higher.

Newstart recipients would generally be eligible for a Low Income Health Care Card. The benefits of the card include cheaper medicine under the Pharmaceutical Benefits Scheme, bulk billed doctor visits (though this is up to the doctor), and a larger refund for medical costs when the Medicare Safety Net is reached.

A small number of Newstart recipients also receive the Mobility Allowance. However, this payment is only available for people who cannot use public transport without a lot of help, have a disability, illness or injury, and need to travel for study, training, work or to look for work.

Other payments for people in special circumstances that incur extra costs include Telephone Allowance ($28.80 per quarter), Remote Area Allowance ($18.20 per fortnight), Pharmaceutical Allowance ($6.20 per fortnight) and the Language, Literary and Numeracy Supplement ($20.80 per fortnight).

In summary, yes, there are extra payments and supplements that people on Newstart Allowance can receive, but they do not increase the overall payments received to an adequate level. Furthermore, the main extra payment, the Commonwealth Rent Allowance would need to be substantially increased if it were to realistically offset the cost of private rental accommodation. For income to just reach the Henderson Poverty Line, either the allowances or extras would need to be increased by a further $24.86 per day. The Henderson Poverty Line has been the standard used by researchers to gauge progress in the community since the 1970s.

Youth Allowance for young people (under 25) looking for work or on apprenticeships: The rate and extras

As for Newstart recipients, the two main extra payments received by Youth Allowance recipients are Commonwealth Rent Assistance and the Energy Supplement. For simplicity, we will examine only the rate for a single person, living independently, without dependants. The maximum rate of benefit is used in each instance.

 

 

Youth Allowance

Commonwealth Rent Assistance

Energy Supplement

Total

Henderson Poverty Line Sept Quarter 2017

Rate per fortnight

$445.80

$134.80

$8.80

$587.60

$1,023.50

Rate per day

$31.84

$9.63

$0.63c

$42.10

$73.11

 

To receive the maximum rate of Commonwealth Rent Assistance you would need to be paying $299.93 a fortnight in rent, which means that you would still have to pay $165.13 out of the Youth Allowance for rent or more if your rent was higher. This would leave you $289.47 per fortnight for other living expenses or $20.68 per day, and less if your rent was higher.

Newstart recipients would generally be eligible for a Low Income Health Care Card. The benefits of the card include cheaper medicine under the Pharmaceutical Benefits Scheme, bulk billed doctor visits—though this is up to the doctor—and a bigger refund for medical costs when the Medicare Safety Net is reached.

A small number of Youth Allowance recipients also receive the Mobility Allowance. However, this payment is only available for people who cannot use public transport without a lot of help, have a disability, illness or injury, and need to travel for study, training, work or to look for work.

Other payments for people in special circumstances that incur extra costs include Telephone Allowance ($28.80 per quarter), Remote Area Allowance ($18.20 per fortnight), Pharmaceutical Allowance ($6.20 per fortnight) and the Language, Literary and Numeracy Supplement ($20.80 per fortnight).

In summary, yes, there are extra payments and supplements that people on Youth Allowance can receive, but they do not increase the overall payments received to an adequate level. Furthermore, the main extra payment, the Commonwealth Rent Allowance would need to be substantially increased if it were to realistically offset the cost of private rental accommodation. For income to just reach the Henderson Poverty Line, either the allowances or extras would need to be increased by a further $31.01 per day.

Student Allowances: Youth Allowance, Austudy and ABSTUDY living allowance: The rates and extras

The main payments to students are Youth Allowance (for those under 25 years of age), Austudy or ABSTUDY living allowance. The two main extra payments received are Commonwealth Rent Assistance and the Energy Supplement. For simplicity, we will examine only the rate for a single person, living independently, without dependants. The maximum rate of benefit is used in each instance.

 

 

 

Youth Allowance & Austudy (Basic)

ABSTUDY (under 22yrs)

Austudy for previously long-term unemployed

ABSTUDY

(22 yrs or older) for Aboriginal & Torres Strait Islander students

Commonwealth Rent Assistance

Energy Supplement

Total

(Basic)

Henderson Poverty Line Sept Quarter 2017

Rate per fortnight

$445.80

$541.70

$545.80

$134.80

$8.80

$589.40

$1,023.50

Rate per day

$31.84

$38.69

$38.99

$9.63

$0.63c

$42.10

$73.11

 

To receive the maximum rate of Commonwealth Rent Assistance you would need to be paying $299.93 a fortnight in rent, which means that you would still have to pay $165.13 out of the Youth Allowance or Austudy for rent or more if your rent was higher. This would leave you $289.47 per fortnight for other living expenses or $20.68 per day (calculated from the basic rate.)

Students receiving allowances would generally be eligible for a Low Income Health Care Card. The benefits of the card include cheaper medicine under the Pharmaceutical Benefits Scheme, bulk billed doctor visits, though this is up to the doctor, and a bigger refund for medical costs when the Medicare Safety Net is reached.

Some other payments that students might receive include:

  • Education Entry Payment:$208 on entry to a course
  • Pensioner Education Supplement: Either $62.40 or $31.20 per fortnight, depending on study load. Principally for students who are on a Disability Support Pension or who are carers of a person with a disability.
  • Relocation Scholarship: For students moving to or from a regional or remote area to study. $4,459 in the first year, and then either $2,231 in second or third years, or $1,115 for subsequent years. (Bills before the Parliament would see the above three payments slashed or access reduced.)
  • Fares Allowance: Either one or two return trips from your place of study. Available for students living away from home to study or who are studying a distance or online course and don’t usually study on campus.
  • Low Income Health Card.
  • Additional payments and benefits associated with the ABSTUDY living allowance: ABSTUDY Incidental Allowance (maximum of $599.30 for a year) is paid automatically. Other payments are paid depending on circumstances. See https://www.humanservices.gov.au/individuals/enablers/payment-rates-abstudy#a2    

A small number of students on allowances also receive the mobility allowance. However, this payment is only available for students who cannot use public transport without a lot of help, have a disability, illness or injury, and need to travel for study. 

The verdict

In summary, yes there are extra payments and supplements for students receiving allowances, but they do not increase the overall payments received to an adequate level. Most extra payments are tied to extra costs that some students will accrue due to their studies. Furthermore, the main extra payment, the Commonwealth Rent Allowance would need to be substantially increased if it were to realistically offset the cost of private rental accommodation. For income to just reach the Henderson Poverty Line for a student on basic Austudy, either the allowances or extras would need to be increased by a further $31.01 per day.

One of the reasons governments have given for having the rate of allowances for students so low is that students can earn more in a paying job before their allowances start to be reduced.

There are two types of problem with this approach. Firstly, many students simply cannot find consistent part time work, and must depend entirely on the allowance. Secondly, many students who are employed are increasingly working long hours in order to complete their study. This has resulted in students being overtired, skipping classes and not fully engaging in their studies, and in many cases delaying courses or dropping out altogether.

There is now a growing body of evidence pointing to the negative impacts of a lack of financial support on the lives and study experience of students in Australia because of the low and declining levels of financial support. See for instance the Universities Australia report on student finances and the Australian Association of Social Workers report on student social workers. Despite this growing evidence and the low levels of financial support, the poverty of students is often overlooked because there is still a common perception that students only come from affluent families. This has changed over the last 30 years, but perceptions have not caught up. Now students from low income families are among the least financially assisted of people who are receiving allowances or pensions. Currently the basic rate for students receiving Austudy, Youth Allowance or Abstudy (for students under 22yrs) is only 83 percent of the Newstart Allowance or 55 percent of the Aged Pension rate.