Income Support In Australia Pushing Young People Into Poverty
Our new report reveals that Australia’s income support system is failing young people across the country, pushing them into poverty.
Youth Allowance and JobSeeker payments for young people fall well short of what is needed to meet the costs of daily living, particularly for those who must live away from home or who cannot rely on help from parents.
High housing costs force students and job seekers into poverty and housing insecurity, compromising education and employment outcomes, physical and mental health.
The current rate structure ignores the actual costs of study, searching for a job or meeting other participation requirements.
The income support system is complex and the rules are hard to understand. It can result in substantially different outcomes for young people in similar circumstances (e.g. living away from home), with almost identical basic living costs and similar capacity to work.
The current system also reflects an old concept of unemployment as a short-term, temporary state experienced between full-time work.
In reality, many young people rely on income support for several years or more while working intermittently, often while studying. Young people face ever-decreasing prospects of a secure job, earning sufficient income to live on without additional support.
In short, we need a different model of income support that is simple, coherent and provides adequate support for young people trying to find a foothold in a casualised and uncertain labour market. The Commission is proposing a Youth Income Guarantee designed for the complex lives of young people in the 21st Century. The Youth Income Guarantee is a single income support payment for young people comprised of a rate of payment above the poverty line, including incentive payments for participation in education, training and job search.
We’re calling for a Youth Income Guarantee that:
- Is a single payment system for 16 to 24-year-olds based on need not age.
- Sets maximum rates of payment at 110 per cent of the minimum income required for healthy living.
- Encourages young people to study, search for work or undertake other prescribed activities with conditionality applied to a maximum of 25 per cent of their payment.
- Has effective incentives to work such as a more generous personal income test threshold, a single taper rate of 50 cents in the dollar above the threshold and a $10,000 income bank.