Sarah Sacher, Economic Justice Australia, Law Reform Officer
A fair social security system is fundamental to addressing poverty. It provides a safety net necessary to keep a person clothed, housed and fed, as well as stability to enable them to plan for the future and engage in their community.
EJA had the opportunity to provide a submission to the Senate Standing Committees on Community Affairs, regarding the Inquiry into the Extent and Nature of Poverty in Australia. The submission is accessible here.
Raising social security income support payment rates
In our submission, we call for action to address the longstanding need to substantially boost social security income support payment rates, and to provide supplementary payments to reflect the specific costs people are facing.
This is particularly urgent as the cost-of-living soars and Australians recover from the economic effects of the COVID-19 pandemic. The temporary addition of the Coronavirus Supplement at the peak of COVID-19 indicates that it is simple to increase social security payments– all that is required is the political will to do so.
It is clear that social security income support rates are inadequarate, especially for people of working age without assets or substantial savings in vulnerable cohorts – including single parents, people with disability, and older people. EJA has received case studies from its member centres which demonstrate this point:
Entrenched cycle of poverty – Anne and Mick
Anne’s JobSeeker Payment was automatically suspended because she was ill and unable to attend job interview. She called up her employment services provider to explain, but they refused to lift her suspension or accept her medical certificate for non-attendance. Anne advised that she desperately needed to have her suspension lifted as it was the end of her payment fortnight and she had no money left for food or other essentials, so she decided to go by train to her employment service’s office to sort it out. She didn’t have any money to top up her public transport card, but was desperate so decided to catch the train anyway. Anne was apprehended at the train station and issued with a fine for over $400. Upon arrival at the employment service they initially refused to see her, and told her to come back the next day. Anne knew that if she left, she risked getting another fine and she wouldn’t be able to buy any food until her payments were reinstated.
With the help of one of our member centre’s lawyers Anne’s suspension was lifted that afternoon. However, the money was not credited to her account in time for her to add credit to her public transport card, and she received a further $200 fine on the way home. Anne now had a $600 debt, with no savings to draw from, so she decided to cut back from 2 meals a day to just 1 meal a day for the next few months in order to pay it off.
Mick was 43 and had been receiving Newstart/JobSeeker payments since he was made redundant four years previously. As a single parent with a 14 year old son, he said he found it extremely difficult to cover all of his basic household expenses. This often meant Mick ran out of money in the second week of his fortnightly payment period, leaving him with no money for public transport, and unable to attend job interviews that weren’t within walking distance of his home. He also often couldn’t afford to top up the credit on his phone, which made it hard for him to engage with employers and employment service providers – sometimes leading to his payments being suspended, increasing his hardship, and making it more difficult for him to pay for the costs associated with job hunting.
Risk of homelessness – Michaelia
Michaelia was 59 years old and facing eviction from her Canberra home when she approached our member centre. She had been solely dependent on JobSeeker Payment since her husband left her 6 months previously, and this was not enough to cover the rent for her small apartment. For a time, she had managed by not paying her utility bills, but on contacting the centre she was in significant rental arrears and facing homelessness due to limited affordable housing options for people her age.
Health at risk – Christian
Christian was in his early 60s and had been struggling with poorly controlled diabetes on JobSeeker Payment for 2 years when he approached our member centre. He regularly split his diabetes tablets in half to make them last longer, as he couldn’t afford to buy them every few weeks. He advised that his doctor had told him not to do this, that he needed to take the full dose or risk having serious complications, but Christian was convinced that this was the only way he could ensure he had enough left over to buy his weekly groceries. He said he knew he should listen to his doctor but didn’t see the point in taking medication if he was not going to have anything to eat.
Addressing exclusionary aspects of the social security system
Reforms to the social security system are needed to prevent the exclusion of particular cohorts of people from receiving income support. Legislative and systemic exclusions can arbitrarily prevent the most vulnerable in our community from accessing payments needed for their survival. These inequities must be addressed in order to meet the fundamentals of a fair and effective social security system.
Key changes that need to be made to the social security policy framework are outlined below.
Abolish arbitrary waiting periods
The start dates of certain income support payments for those who are eligible may be delayed due to ordinary waiting periods and liquid assets waiting periods. We endorse ACOSS’s proposal that these waiting periods be revoked. We consider them to be anomalous and counter-productive to effective job searching, forcing people with modest savings to expend financial buffers needed to meet ongoing costs such as utility bills, and car registration.
We also call for the abolition of the ‘newly arrived waiting period’ (NARWP). The NARWP generally applies to new arrivals who must wait four years before they are able to access social security working age payments. The NAWRP applies to Special Benefit, which is intended to be the payment of ‘last resort’ for those in financial hardship. While there are legislative exemptions enabling a person to skip the waiting period for Special Benefit, a person must also show that their current financial hardship and lack of means of support is due to having ‘suffered a substantial change of circumstances beyond (their) control’ after arrival in Australia. This is very difficult to prove in practice and ignorance of the waiver provision means that destitute people who may qualify for the payment do not claim.
Rather than encouraging self-sufficiency and cost savings, subjecting new migrants to a NARWP for Special Benefit undermines efforts to settle and secure employment. The NARWP fuels poverty and homelessness, leads to pressure on charities and community organisations and exposes new migrants to workforce exploitation. The NARWP was abolished during COVID-19, demonstrating that it is entirely possible to remove it when there is political will to examine and respond to its negative impacts.
Provide long-stay visa holders with access to Special Benefit
There are cohorts of people living in Australia on long-stay work or student visas who cannot qualify for Special Benefit under the legislative eligibility criteria. During the COVID-19 lockdowns and the subsequent economic downturn, an inability to access Special Benefit or JobKeeper Payment forced many international student and migrant workers who lost work to either return to their home country, seek charitable support, or work in the cash economy – and be exposed to exploitation. As Australia looks to attracting migrant workers back to Australia it will be important to ensure that access to income support for holders of long-stay visas is available.
Address disability support pension inequities
Many people with disability are unable to gain access to the Disability Support Pension (DSP). They are effectively consigned to JobSeeker or other activity tested payments indefinitely, struggling to comply with mutual obligations.
The current DSP legislative framework and system for assessing DSP eligibility imposes systemic barriers to accessing DSP for particular cohorts of people with disability.
We particularly highlight our concerns regarding section 94 of the Social Security Act, which provides that a person with disability and no or minimal capacity for work may be required to participate in a ‘program of support’ for 18 months, which is intended to assist a person to ‘prepare for, find and maintain work’. We consider the program of support requirement to be inappropriate and ill-defined– section 94 should be amended to remove it, or at least to include criteria for exempting a person from the requirement.
Cease all compulsory income management
The legislative change which abolished the Cashless Debit Card (CDC) last year is a positive first step towards ending compulsory income management. If income management continues as a policy measure, participation should be voluntary and opt-in only
Address anomalous social security waiver provisions for victim-survivors of family and domestic violence
A key issue identified in EJA’s report, Debts, Duress and Dob-ins: Centrelink compliance processes and domestic violence, is domestic violence victim-survivors’ vulnerability to accruing social security debts as a direct result of the actions of abusers. For example, in circumstances where a violent partner refuses to provide information, or provides false information, about their income and assets, which can lead to inaccurate eligibility assessment and rate calculations (and associated debts).
The Social Security Act provides that a person’s debt may be waived if it can be established that there are ‘special circumstances’ to do so. The fact that a person is a domestic violence victim-survivor may certainly be considered ‘special circumstances’ under the Act. However, for the relevant section (1237AAD) to apply, the debt cannot have been incurred as a result of the debtor or ‘another person … knowingly’ making a false statement, representation or omission. This wording effectively means that in circumstances where a victim-survivor was coerced into ‘knowingly’ making false statements by their partner, or where a violent partner alone has made false statements or omissions, the victim-survivor will be excluded from obtaining a ‘special circumstance’ waiver. Legislative reform is required to address this.
Revise the application of Compensation Preclusion Periods
Where a person receives a lump sum compensation payment for a compensable injury that includes payment for loss of earning capacity, social security law applies a compensation preclusion period (CPP) – during which time specified social security income support payments are not payable, often for several years. CPP’s can be waived in ‘special circumstances’. However it is very difficult for claimants to argue successfully that their CPP should be reduced or waived completely. Our research report, Compensation preclusion periods and the impact of COVID-19, outlines reform proposals in this regard. The case study of Bill, provided by Basic Rights Queensland to the Community Affairs Reference Committee illustrates the nature of the problem.
Case study – Bill
Bill is a 38-year-old who was in a motor vehicle accident which rendered him disabled. Bill received a compensation payout, so his Centrelink payments were stopped for a period of time. Due to the rising costs of living, medical costs, accommodation and food, Bill quickly used the full amount of his compensation payout. With no source of income and no ability to work, Bill contacted one of our member centres for any support or information about how long he would not be eligible for Centrelink payments. While our member centre provided advice, Bill disclosed that he was so concerned about becoming homeless that he had even considered committing a crime in order to be housed in incarceration facilities
Address Services Australia staffing issues
One of the most critical areas of investment required to improve outcomes for all people who need support through the social security system is Centrelink staffing. Investment is particularly needed to improve access to social workers, including specialist social workers, and those able to provide services in remote areas. This is illustrated by the following case study, also provided by Basic Rights Queensland:
Case study – Sharlene
Sharlene was a 24-year-old single mother with two children. She lived with her family in a remote area and had difficulty accessing Centrelink Services over the phone and online. Due to COVID-19 travel restrictions, the Centrelink remote servicing team had not visited this area for over 2 years. Sharlene had noticed that her payments had significantly reduced, so she made many attempts to contact Centrelink over the phone, but all were unsuccessful. While doing rural and remote outreach, one of our member centres was able to contact the remote servicing team at Centrelink for Sharlene. They advocated for Sharlene and were quickly able to figure out that Sharlene had been underpaid and that the error was made by Centrelink. Immediately, a Centrelink Officer was able to backpay $6000 to Sharlene, as well as organise for her to be on the correct payment to support her and her children.
Address access to justice barriers
There are number barriers preventing vulnerable social security recipients from accessing justice, including to remedy unfair decisions.
There is a need to improve communication lines between Centrelink and legal advocates. EJA member centres often require immediate access to the relevant decision-makers at Services Australia in order to assist their clients—for example where a client is homeless and the legal service has no way to contact the client again. There is no regular channel to facilitate this kind of access. We consider it imperative for funding to be provided to establish a Centrelink nationwide specialist hotline for community legal centre advocates to address this need.
Social security legal assistance services must be adequately funded. The social security system and legal framework can be difficult if not impossible for individuals to navigate without specialist assistance – especially vulnerable individuals. There is a high demand for specialist social security legal assistance that remains unmet. Unlike most other areas of specialist community legal centre practice, there is no private sector equivalent where people can go for legal advice or representation. Legal aid does not provide representation for internal Centrelink reviews in any jurisdiction, and not all states and territories provide advice and representation at the AAT level. Our social security legal centres may have nowhere to refer people when they are at capacity, which is increasingly the case.
As the Robodebt saga teaches us, improving access to social security legal advice and representation would enable the social security system to work more efficiently and as intended.