News National Experts slam tough new welfare rules as ‘idiotic’

Experts slam tough new welfare rules as ‘idiotic’

More than 42 million calls to Centrelink this financial year received an engaged signal. Photo: AAP
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The Turnbull government has been slammed for suggesting that people are spending their money on “non-essential items” to get welfare payments sooner.

The government recently lifted the bar for people requesting Centrelink waive the one-week waiting period that applies to those claiming a welfare payment for the first time.

It said the measures were about improving consistency between payments and better targeting support at people in need.

But the legislation’s explanatory memorandum reveals that government believed it was also needed to deter people who were spending their money on “non-essential items” to get payments sooner.

“The tightening of the severe financial hardship waiver also acts as a discouragement for people to spend their resources on non-essential items in order to obtain income support payments,” the document says.

Swinburne University welfare expert Dr Kay Cook condemned that suggestion, saying that she was not aware of any research that backed up the claim.

“I think that sounds idiotic,” Dr Cook told The New Daily. 

“Say you had $500 in your account and no foreseeable source of future income. It defies logic to think that someone would spend that $500 on something that was not essential, like a new iPhone, and then not know how you were going to pay the rent or buy food, all in the hope you would get an income support payment a week earlier.”

Tougher rules

Under welfare rules, people claiming assistance under the Newstart Allowance can have the mandatory one-week waiting period waived if they’re experiencing severe financial hardship.

That one-week waiting period has now also been extended to parenting payments and Youth Allowance.

A person is considered in ‘severe financial hardship’ if the money they have is less than their fortnightly payments for a single or less than double for a someone in a couple.

To be eligible for a waiver under the new rules, people will have to show evidence that they are in ‘personal financial crisis’, meaning they have been a victim of domestic violence or incurred “unavoidable or reasonable expenditure”.

The changes were part of wider welfare reforms, including a freeze in the indexation of family payments, which the government said would help pay for its $1.6 billion boost to child care subsidies.

The stricter rules around waiting periods are projected to recoup $190 million.

ACOSS chief executive Cassandra Goldie said: “This new requirement is a mean spirited and erroneous measure which will really hurt people needing assistance.

“The requirements are specifically aimed at hitting people on low-incomes. When did our values become so punitive to people in extreme need?”

Greens community services spokeswoman Rachel Siewert said the suggestion people might spend their money to get welfare payments was “a ridiculous comment for the government to make”.

“We’re talking about people who are applying for payments for a reason,” she said.

A spokesman for Social Services Minister Christian Porter said the new measures would better target the financial hardship waiver “to people in need due to a personal financial crisis, such as reasonable or unavoidable expenditure or domestic violence”.

“It’s designed to prevent people claiming severe financial hardship when a person claiming income support has used his/her own resources on non-essential items and then seeks income support,” he said.

Labor’s Social Services spokeswoman Jenny Macklin said the changes would make life “harder for people who are already in a difficult financial situation”.

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