Tuesday, April 17, 2012

Newstart won't even pay the rent

So low has the Newstart unemployment benefit fallen compared to the cost of living it now won’t even pay the rent on a typical Sydney one bedroom unit.

New calculations from the Tenants Union of Victoria show the single Newstart allowance with associated rent assistance now either just meets or fails to meet the median rent in every capital city other than Adelaide and Hobart.

Newstart is $244.85 per week, rent assistance an extra $60.10. In Sydney the $304.95 total falls far short of the $420 median rent on a one bedroom flat. In Melbourne and Perth it barely exceeds the $300 median.

If a jobseeker on Newstart decides to share, paying half the rent on on a two-bedroom flat, his or her rent assistance is cut, bringing down total $284.90 per week, leaving just $60.90 per week to spare after rent payments of $225. The excess needed for food, clothes, fares and utility bills works out at $8.70 per day.

Tenants Union of Victoria liaison officer Toby Archer says single Australians looking for work have to adapt, renting housing below the median, sharing overcrowded houses, couch surfing and using boarding houses and caravan parks.

“But even in boarding houses rent consumes a big part of their income... They spend as little as they possibly can on food, they avoid going to the doctor or the dentist, they don’t buy medication. They find it hard to present themselves for jobs.”

“By the time we see them they are behind on their rent, they’ve already eaten into savings, sold their cars and pawned things of value.”

Once comparable to the pension, Newstart has failed to keep pace since the two were indexed separately in 1997. The unemployment benefit is now just two-thirds of the single pension and is slipping with each half-yearly adjustment. In March the pension was lifted $3.35 per week, Newstart $1.45 per week.

Greens leader Christine Milne this week committed herself to winding back some of the $132.90 per week gap, saying some of the planned cut in company tax should be diverted to lifting Newstart $50 per week.

Treasurer Wayne Swan has acknowledged the problem telling the Press Club in the lead up to the budget there is “a case about the gap that has opened up,” but adding, “how we can deal with that in the longer term is a difficult one given that the fiscal pressures and so on the government is facing”.

Greens Senator Rachel Siewert is this week attempting to live on $17 per day, her calculation of what Newstart jobseekers would be left with if they handed over only half their income in rent.

In today's Sydney Morning Herald and Age


Related Posts

. How bad are Australia's unemployment benefits? Bad and getting worse.

. NewStart. Swan takes the point, but says the surplus matters more

. Try living on NewStart. It's getting harder. ABS figures show so.


9 comments:

derrida derider said...

The big political problem here is that most people have no idea what the typical circumstances of a long-term Newstart recipent are. They think they're long-haired surfers having a holiday at Byron Bay.

In fact many - even most - long termers are people carrying serious disabilities. Most commonly its mental health problems, though physical disabilities are common too.

This is because (perhaps rightly)we have made Disability Pension very hard to get. You basically have to convince people that you could never work, even part time, again in any circumstances. But of course many mental illnesses are intermittent and so their sufferers won't meet this criterion.

Rudd gave an awful lot of money to the states to address homelessness, when far the single biggest cause of homelessness in Australia is the grossly inadequate rate of Newstart. And he gave a lot of untargeted money to age pensioners, when every study of poverty in Australia showed that's not where the problem was. So much for his much-vaunted commitment to "evidence-based policy".

Peter Martin said...

Indeed.

Anonymous said...

The real story is not in the very low base rate, but other discriminatory aspects of welfare policy that are punitive towards Newstart recipients compared to other income support recipients. Perhaps the best example is what is referred to (from memory) as the income test, which is the amount of money you can earn each week before the Newstart is cut. For Newstart recipients it is about $31 a week, or 2 hours at less than the minimum wage. For every dollar you earn above that amount you lose 50c in the dollar. Now if you compare this threshold with what pensioners, parenting payment recipients and students are allowed to earn, you will be shocked at the difference, especially given the higher levels of the base rates of those payments (except the student allowance, which is lower than Newstart).
And I wish someone would ask Wayne Swan and Gillard etc why they have not abolished the almost criminal liquid assets test, which only applies to newly unemployed people, not other income support recipients. Ken Henry recommended this be abolished. It can result in very long waiting periods before the dole is even paid, by which time all your savings can run out.
None of this is coincidence. These policies are the way they are because both sides of politics despise unemployed people. It's a class hatred thing. And Labor is just as mean as the Libs on this. Listen for the dog whistle next time the Prime Minister refers to 'working' families.
Thanks for writing about these issues Peter.

Magpie said...

Peter,

A question: ABS 6463.0 shows the Analytical Living Cost Indexes for Selected Household Types.

But where can one get the number of households in these types? Say, how many age pensioner households are there, how many other government transfer recipient households, etc?

Anonymous said...

The liquid assets test essentially means that everyone except the desperate aren't eligible for unemployment benefits. I wonder how many people are actively looking for work and not receiving any benefits? This is probably why the public doesn't care that the level is set below what is required because for most of the population it isn't something they can use anyway. I've never been eligble when I've been looking for work.

Anonymous said...

The liquid assets test essentially means that everyone except the desperate aren't eligible for unemployment benefits. I wonder how many people are actively looking for work and not receiving any benefits? This is probably why the public doesn't care that the level is set below what is required because for most of the population it isn't something they can use anyway. I've never been eligble when I've been looking for work.

derrida derider said...

Magpie, what you want is probably in 6523.0, but you can probably also find it in attachments to the 6463.0 publication.

Magpie said...

Derrida Derider,

Great! Thanks.

Anonymous said...

I am only just realising I am not alone in the issue of being a newstart recipient. It does make one feel inferior...after thirty more years of raising four children, two of which had/has disabilities single handedly then returning to study to find work...and dont forget how old I would be at this point and developing medical problems myself, find work only to be made redundant 18 months later. I then returned to study...still with medical conditions not eligible for disability pension...looking for work again. The cut backs I have made to survive to still maintain some decent but extremely humble standard of living have been hard and only those people,up until now,would understand. There needs to be a change and recognition that I, we on newstart for the majority did not ask to lose our jobs. Every wants and deserves a decent standard of living and not suffer humiliation and prejudice because of job loss. As an aging job seeker it is now a realization for me now after searching and reading these powerful campaigns if you will for a 'better fairer' system for job seekers and now feel there is help...real help on the way.

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