In its 2017-18 budget, the Turnbull government announced plans to cut millions of Australians off social security payments.
Under the pretext of tackling ‘welfare dependency’, the government is transforming Centrelink into a compliance institution tasked with harassing, humiliating and financially penalising social security recipients.
No one was spared – single parents, unemployed, disabled people, migrants, the aged and families were all targeted.
Mr Turnbull’s goal is simple: make collecting a social security payment so humiliating and impoverishing (the dole is $380 per fortnight below the poverty line) that recipients can be easily bullied into working at dodgy workplaces for below minimum wage – see the government’s $4-an-hour PaTH program.
This government effectively wants to turn social security recipients into cannon fodder in their war on workers.
The government estimates that as part of this aggressive approach it will take $3.4 billion out of the pockets of social security recipients over the next 5 years. Here’s how:
Mandatory drug testing
(Scheduled for 1 January 2018, cost undisclosed)
The government wants to drug-test 5000 unemployed Australians for marijuana, ecstasy and methamphetamines as part of a two-year trial.
People who refuse to take the drug test will be fined and those who test positive will be forced onto the cashless welfare card. A second positive test will result in a referral to a “contracted medical professional”.
Given that a 2014 government report stated that between 200,000 and 500,000 Australians are being denied access to drug treatment due to lack of resources – a problem ignored in the budget – it is unclear how this approach will help social security recipients with drug-related illnesses.
Tougher demerit point system
(Due 1 July 2018, $632 million budget cut)
Under the new demerit point system, unemployed Australians who miss mandatory appointments or activities with their job agency will face harsher punishments.
A reduction of four demerit points over a six month period will result in unemployed people being pushed into a three-strikes compliance system in which the strikes are:
- One strike: Fine half of fortnightly payment ($250)
- Two strike Fined entire fortnightly payment
- Strike Three: Payments cancelled altogether for at least 4 weeks
To meet the $632 million ‘saving’ target, the government would need to impose a staggering 2.5 million $250 fines.
The demerit point system will worsen the culture of fear and intimidation pervading Turnbull’s $10 billion employment services industry.
Last year alone, private job agencies imposed two million penalties on unemployed workers – a ten-fold increase since 2011.
Of these penalties, Centrelink overturned roughly four out of 10 penalties upon review. Job agencies need to be investigated and better regulated, not given more powers.
To go along with this tough new compliance system, the government will increase the mutual obligations of 270,000 people aged between 30 and 49 by 20 hours a fortnight – obligations that are already some of most onerous in the world, according to the OECD.
Denying support to people with drug related illness
(Currently before Parliament, $21.7 million budget cut)
Disability Support Pensioners who suffer from a drug related illness will be ineligible for the payment under the government’s plan.
The government estimates that with this change will result in at least 450 DSP applications being knocked back each year, further reducing the current 15 per cent success rate for applicants (a rate with has halved since 2014 as a result of previous crackdowns).
Similarly, from 1 January 2018, unemployed Australians suffering from a drug related illness will not be eligible for an exemption from their onerous mutual obligation requirements, affecting 11,000 each year (at a cost of $28.8 million).
Expansion of the cashless welfare system
(Due 1 September 2017, cost $145 million)
Despite the extensive evidence showing that cashless welfare does not help people suffering from drug-related illness, the ‘Healthy Welfare Card’ will be expanded beyond its current trial sites in Ceduna and East Kimberly to two new locations over the next two years.
Proposed by mining billionaire Andrew Forrest and set to be administrated by the INDUE company, the ‘Healthy Welfare Card’ quarantines 80 per cent of the social security recipients entitlement to a card that can only be spent at government-approved locations.
The government also plans to extend the income managements sites (in which 50 per cent of income is quarantined) for a further two years.
Department of Human Service staff cuts
($277 million budget cut)
The government has announced it will cut 1188 staff from the Department of Human Services (Centrelink), and open a commercial process for private companies to take over its call centre operations.
According to the Community and Public Sector Union, Mr Turnbull’s decision to outsource call centre operations means that calls will be handled by inadequately trained staff, and that a private company will have access to private records.
Over the past five years, the government has cut 5000 DHS staff crippling the quality of service. As a result, 42 millions calls to Centrelink received the engaged signal in the first 10 months of the 2016/17 financial year.
An estimated 220,000 people received aggressive robo-debt letters, 20 per cent of whom were found to be incorrect by a recent Senate inquiry.
By cutting more staff, the government are saying that this poor quality of service is not just acceptable – it’s desirable.
Stricter eligibility for payments
(Due 1 July 2017, $335 million budget cut)
Social security applicants will receive payment only from the date they lodge a complete claim.
Currently, Centrelink backdates social security payments from the date applicants lodged an incomplete claim.
Additionally, from 20 September 2018, the waiting period for applicants with more than $18,000 (singles) or $36,000 (couples and/or singles with dependents) in liquid assets will double to 26 weeks.
And finally, from 1 July 2018, there will be stricter access to the DSP and Aged pension for people with less than 10 years Australian Working Life Residence.
Investigating Single Parent Pensioners
(Due 1 January 2018, $93.7 million budget cut)
To be eligible for the Singe Parent Pension, new applicants and current recipients will need a third party to substantiate their claims that they are single. Witnesses caught making a false declaration face up to a year in jail.
Attacking Family Benefits
(Due 1 July 2017, $2.4 billion budget cut)
Payment rates for Family Tax Benefits Part A and B will be frozen for two years. Additionally, the reduction rate for Family Tax Benefit Part A for families with income over $94,316 will increase to 30 cents in the dollar.
Owen Bennett is president of the Australian Unemployed Workers Union, an organisation dedicated to fighting for the rights and dignity of the unemployed.