Welfare – Putting a Price on Dignity
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1 Welfare – Putting a Price on Dignity Prepared as a submission to the Senate Standing Committee on Community Affairs Inquiry into the Adequacy of Newstart and related payments and alternative mechanisms to determine the level of income support payments in Australia September 2019 For more information, please contact: Major Brad Halse Head of Government Relations The Salvation Army Australia 0 Table of Contents Statement of Recognition .............................................................................................................................. 1 Living with Dignity ......................................................................................................................................... 2 Adequacy of Income ..................................................................................................................................... 3 The Poverty Trap ....................................................................................................................................... 3 Maria’s Story* ......................................................................................................................................... 4 Meeting basic needs .................................................................................................................................. 5 A response from the Newstart Inquiry Survey ....................................................................................... 7 The story over time .................................................................................................................................... 8 A response from the Newstart Inquiry Survey ....................................................................................... 8 Value in Society .......................................................................................................................................... 12 Social and Economic Participation .......................................................................................................... 12 A response from the Newstart Inquiry Survey ..................................................................................... 12 Barriers to Employment ........................................................................................................................... 13 A response from the Newstart Inquiry Survey ..................................................................................... 15 Isolation from Community and Loneliness .............................................................................................. 15 Mental Health .......................................................................................................................................... 16 A response from the Newstart Inquiry Survey ..................................................................................... 17 Inherent Dignity ........................................................................................................................................... 18 The Complexity of Centrelink .................................................................................................................. 18 A response from the Newstart Inquiry Survey ..................................................................................... 18 Matt’s Story* ......................................................................................................................................... 19 Melanie’s Story* ................................................................................................................................... 19 Mutual Obligation ..................................................................................................................................... 20 The Cashless Debit Card ........................................................................................................................ 21 Mandatory Drug Testing .......................................................................................................................... 22 Jane’s Story* ........................................................................................................................................ 22 Practical Actions .......................................................................................................................................... 23 Setting Welfare Levels ............................................................................................................................. 23 Avoiding the Trap .................................................................................................................................... 23 Government Services .............................................................................................................................. 24 About The Salvation Army .......................................................................................................................... 25 Appendix A – The Lived Experience 1 Statement of Recognition The Salvation Army acknowledges the Traditional Custodians of the lands and waters throughout Australia. We pay our respect to Elders, past, present and emerging, acknowledging their continuing relationship to this land and the ongoing living cultures of Aboriginal and Torres Strait Islander peoples across Australia. Welfare – Putting a Price on Dignity Inquiry into the Adequacy of Newstart and related payments and alternative mechanisms to determine the level of income support payments in Australia The Salvation Army 2 Living with Dignity The Salvation Army welcomes the opportunity to share our experience and the stories of the people with whom we work with the Senate Standing Committee on Community Affairs. The Salvation Army provides a wide range of services and support to people across Australia as part of realising our vision and living our values. Fundamental to the ethos of The Salvation Army is the idea that every single human being has inherent worth and every person should be able to live with dignity. For some time now we have known that the inadequacy of Newstart, Youth Allowance and related payments is a major driver of disadvantage in Australia. We are grateful that the Senate is undertaking this review and we hope that it can provide a catalyst for the many parties interested in this issue to work together to address payment inadequacy. This submission does not contain everything The Salvation Army would like to say on this topic. This has been a key advocacy area of ours for a very long time and so we have tried to keep our submission to the elements that are most within The Salvation Army’s experience. It is also very important to us that we amplify and do not crowd out the voices of those who are actually experiencing hardship. Consequently, this submission focusses on providing that lived experience with commentary only where it can add value. This submission is broadly in five parts: Adequacy of Income – examining how people spend their allowances and how this has changed over time concluding that Newstart and related payments are inadequate. Value in Society – discussing how people we work with view welfare, employment and themselves concluding that the inadequacy of Newstart and related payments is itself a barrier to employment and a contributor to social isolation and poor mental health. Inherent Dignity – sharing how the systems and process of Centrelink and the welfare model more generally impact on individuals concluding that the way welfare is conceived needs reconsideration. Practical Actions – offering recommendations for government action to address hardship. Lived Experience – as an appendix to this submission, 249 stories from our request for people on Newstart to tell us what they think the Committee needs to know. Welfare – Putting a Price on Dignity Inquiry into the Adequacy of Newstart and related payments and alternative mechanisms to determine the level of income support payments in Australia The Salvation Army 3 Adequacy of Income The Poverty Trap Newstart and related payments are intended to be temporary measures. They are designed to operate as a safety net while a person transitions to a new job (or prepares for their first job). At their current levels and configurations, income support payments are not achieving their purpose. Newstart is not a safety net. The current level of Newstart is too low to allow a person to avoid poverty. While a person living with extreme frugality may be able to ‘make do’ for a short period of time, even the slightest disruption can lead to financial trouble. Ordinary, everyday occurrences such as an electricity bill, a compulsory school excursion, or a broken household appliance, become unmanageable when reliant on Newstart. This precarious income level can operate like a trap. A person reliant on Newstart borrows money to make ends meet, but then the servicing of that debt adds to their expenses. A person reliant on Newstart terminates their mobile device and internet plans, but then finds that lack of connectivity affects their ability to find jobs and schedule interviews. A person reliant on Newstart has no funds for education, but then is not competitive for jobs. A person reliant on Newstart moves to cheaper accommodation, but then expends more in transport costs in seeking employment and keeping their child in schooling. A person reliant on Newstart sacrifices transport costs, such as fuel and public transport fares, but then cannot participate