INCOME ADEQUACY AND EQUALITY FOR WOMEN
PRIORITIES
- Raise the rates: there must be a one-off increase in all working age income support payments (Jobseeker, Youth Allowance, Austudy, Abstudy, Special Benefit) and in Parenting Payment to match the poverty line for different household types, as calculated by the Melbourne Institute of Applied Economic and Social Research. Benefits should be indexed by the Pensioner and Beneficiary living Cost Index recommended by the Australian Bureau of Statistics.
- Remove punitive and arbitrary conditions and compliance mechanisms: the Targeted Compliance Framework should be abolished.
- Remove poverty traps limiting workforce participation from the tax and transfer system, including removing the Child Support Maintenance Income test from Family Tax Benefit A calculations. Parity should be restored between Parenting Payment Single and pensions, and the workforce activity test removed, recognising child-rearing as valued work in its own right.
- Investigate the feasibility of a Guaranteed Minimum Income scheme: the Productivity Commission should conduct a public Inquiry into a GMI scheme and develop and cost models for a GMI scheme for Australia, including options for financing it.
RATIONALE
Raise the rates
Australia is a wealthy country with increasing inequality and a significant and growing gender wealth gap, and substantial numbers of people experiencing poverty and real deprivation (between 9.8% and 13.8% of Australians, depending on the measure of poverty used). Poverty measures can reflect income lower than required to achieve a certain standard of living, or a level below a set proportion of national income, or a measure of affordability leading to social exclusion.
At a basic level a decent income must provide security of food and shelter. Yet income support is still paid at below the poverty line. JobSeeker ($778pf) is between 57% and 72% of the poverty line, depending on the indicator used. Despite the $40 pf base rate increase in JobSeeker in the 2023/2024 Budget the payment is inadequate to provide basic necessities. The present income support measures have been found to fail on the grounds of adequacy, material deprivation, financial stress, poverty rates and poverty persistence, according to the Federal Government's Economic Inclusion Advisory Committee's (EIAC) 2024 Report to Government. According to the 2024 Foodbank Hunger Report, 69% of single parent households, half the households with income under $30,000pa and a third of all Australian households (3.4 million) experienced food insecurity in 2024.
Research by the ACOSS/UNSW Poverty and Inequality Partnership, shows that under a quarter of Australian people think that it would be possible to live on JobSeeker, 86% consider that unemployment payments should be enough for people not to have to skip meals, and 84% think it should be enough so people can see a doctor. 62% think that government policies contribute to poverty and 75% think that it can be solved with the right systems and policies.
Once income support payments are increased to at least the poverty line for various household types, regular and well-based indexation is necessary to maintain the increased relative value. Currently indexation occurs twice a year, in March and September. Where indexation is solely to the Consumer Price Index, as for JobSeeker, the full costs of expenses that rise faster than the CPI are not captured and the value of payments can fall relative to wages. Hardship can be experienced in paying the increased prices ahead of the retrospective indexation. The EIAC 2024 report found that increases in JobSeeker would have only a small effect on incentives to work and would enhance job capacity to search for and accept employment (pp7,18,23).
Remove punitive and arbitrary conditions and compliance mechanisms
The conditions attached to the inadequate income support payments are complex, harsh and frequently counterproductive. The consequences of payment suspension, financial penalties and cancellation are severe, including homelessness, destitution, relationship breakdown and mental and physical illness. The desire to minimise the administration cost of these requirements has led to the use of automated eligibility and compliance systems which have often resulted in arbitrary and unjust application (as it did with Robodebt), failing to take account of people’s needs and circumstances. Automated payment suspensions remain part of the Targeted Compliance Framework.
The causes of the gender wealth gap are many, interrelated and varied for particular groups of women. Women are still disadvantaged in their earnings by gender-segregated employment, undervaluation of female-dominated work and the disproportionate load of caring responsibilities. ABS data for May 2024 shows that the gender pay gap in mean weekly cash earnings was 26.4%. Income gaps for First Nations women are greater, reflecting their greater levels of time spent caring for children, people with a disability, and in kinship, community and cultural responsibilities. Women in rural and remote areas have significantly lower incomes - $575pw compared to $700pw in major urban centres. Surveys show that a higher proportion of LBTIQA people have incomes below the poverty line, and higher levels of domestic and family violence. Women with a disability have lower rates of employment and lower incomes although their education levels have continued to increase.
Women from culturally and racially marginalised groups are over-represented in low paid and insecure work, in a narrower range of occupations. Older women have lower levels of employment and of superannuation, reflecting a lifetime of employment disadvantage and a disproportionate share of caring responsibilities.
Remove poverty traps limiting workforce participation from the tax and transfer system
The inadequacy of income and other support for single mothers exposes them and their children to ongoing risks of poverty, insecure accommodation, and family/domestic and financial abuse. 16% of Australian families have one parent, 78% of them women. More than half the single mothers fled family/domestic violence (ABS).
The conditions imposed for support can themselves exacerbate those risks. For example, requirements to comply with the Maintenance Action Test and the Maintenance Income Test to seek a former partner’s support for their children expose single mothers to risks of violence and/or financial abuse. Yet meeting these tests is required for ongoing eligibility for and correct calculation of Family Tax Benefit Part A. Parenting Payment for a single parent (up to $1,007.50pf) is insufficient for many households to meet the challenges of rising cost of living, housing, and any special needs, while caregiving responsibilities restrict access to employment to secure additional income.
Investigate the feasibility of a Guaranteed Minimum Income scheme
Existing approaches to income support are not fit for purpose and don’t adequately meet people’s needs. The levels are too low, complexity is too great, and the conditions too onerous and often unjust. Over time there have been a great many small changes to the schemes without a fresh and principled consideration of how best to meet people’s income support needs. Various types of Guaranteed Minimum Income schemes have been considered in a range of countries and regions.
The Scottish Government's 2024 review of European Guaranteed Minimum Income schemes identified four types: restrictive (addressing deep poverty); protective (designed to uphold a socially accepted minimum, often with job search conditionality); enabling (relatively generous, and fostering other forms of social participation), and targeted (to specific social groups). The overall findings are:
- The importance of appropriate targeting (eg removal of deep poverty) together with a multi-faceted approach (eg addressing gender disadvantage and child poverty) in order to avoid unintended consequences such as poverty traps.
- The need for a flexible approach to conditionality and a recognition of linking social inclusion to labour market activation. A strict work first conditionality is inappropriate for individuals needing wider social support to effectively access the labour market.
- The need to recognise and financially support groups who are currently disadvantaged such as those providing unpaid care.
Such schemes should aim to provide an adequate level of income support for everyone without arduous and administratively complex requirements, a simplified welfare system, and income for currently unpaid work in caring and other community support. The schemes could support broader social and economic participation and enable entrepreneurship with broader economic benefits.
Some important areas to investigate are: the level of income to be provided, how to fund and implement, how the scheme would relate to the broader welfare system, and how public support for a scheme with limited and flexible conditionality could be developed. The Productivity Commission is best placed to progress consideration of such a scheme.
Current positive initiatives under consideration include research on the costs and benefits of further increases to Jobseeker; development of a new remote employment service to replace the Community Development Program/ Remote Jobs and Economic program; the removal of the Child Support Maintenance Income Test from the Family Tax Benefit Part A payment; research on the impact of Jobseeker and Parenting Payment on victim/survivors escaping domestic violence; the Building Women's Careers Program to improve access of young women and non-binary people to flexible, safe and inclusive training and work in male-dominated sectors construction, clean energy, advanced manufacturing and digital and technology sectors, and the DSS trial Escaping Family Violence Program (1921-mid 2025). WEL calls for these measures to be.expedited.
Considerable progress has already been made in raising wages in care economy jobs, to the benefit of workers (mainly women), and the better functioning of those labour markets and services.
WEL welcomes legislation that 12% will be added to Paid Parental Leave to contribute to superannuation, and the announcement that from July 2026 employers are to be required to pay employees' superannuation at the same time as wages.
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