No dole before 25: youth will have to earn or learn

PATRICIA KARVELAS
The Australian
May 03, 2014
TOUGH new “learn or earn” rules that will deprive all people younger than 25 from receiving the general unemployment payment and push them onto the lower-paying Youth Allowance are set to be unveiled in the federal budget.
The Weekend Australian can reveal that the Abbott government’s first budget will contain a huge welfare reform package with a range of measures, including extending by three years the period before which young people can apply for the Newstart Allowance.

The government will pitch the change as a measure to force young people into training for “real jobs”.
Currently, young people can apply for Newstart, which pays $510 a fortnight, when they turn 22. Until then, they can receive Youth Allowance, the full rate of which is $414 a fortnight.
The changes will kick in from January 1 next year and will save millions from the budget bottom line.
The latest figures, from March, reveal that the number of Newstart recipients had grown by 7.5 per cent over the previous 12 months, from 682,120 to 733,601. The number of Youth Allowance recipients rose 6.8 per cent, from 106,244 to 113,456.
Under the “earn or learn” welfare crackdown, school-leavers could also face a six-month waiting period before they can apply for Youth Allowance.
The changes to unemployment and Youth Allowance eligibility fit into a broader package of welfare cuts and reforms that the Abbott government is preparing as it seeks to overhaul the commonwealth budget and take control over what it has described as a “budget emergency”.
The federal budget, which Joe Hockey will deliver on May 13, will respond to the National Commission of Audit report by accepting some of its proposals but also finding other savings to meet the central target, of both the audit report and the coming budget, of producing a budget surplus by 2023-24.
Healthcare and welfare will be the federal budget’s key targets for long-term fiscal reform.
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The Weekend Australian has learned that controls for the Disability Support Pension will also be tightened in the budget, including rolling reviews of recipients. A senior source said the reviews could occur as frequently as every three months, to determine whether people are still eligible for the payment.
Other changes will include that, from July 1 this year, jobseekers aged 18-30 who have been unemployed for a year or more and are receiving Newstart or Youth Allowance will receive $2500 if they get a job and remain off benefits for 12 months.
A further $4000 will be paid if they are employed for two years. From July 1, jobseekers in receipt of Newstart, Youth Allowance or the Parenting Payment can also receive up to $6000 for relocating to a regional area to take up a job. Up to $3000 will be paid to eligible jobseekers who relocate from a regional area to a metropolitan area to take up a job.
Australia is facing a youth unemployment crisis amid an explosion in the number of young people actively looking for a job and living on welfare payments.
The audit commission called this week for a new rule to tackle youth unemployment by forcing young single people aged 22-30, without dependants or special exemptions, to move to areas of higher employment or lose access to benefits after 12 months on the dole.
It also called for an increase to the income-test withdrawal (taper) rate from 50 per cent to 75 per cent for recipients of Newstart and other related allowances.
The commission argued that the current income-test arrangements mean that a single person with a private income of about $25,000 a year can still access the Newstart Allowance.
“This is almost twice the maximum payment of Newstart Allowance and is relatively high for a safety net payment,” it said.
It is proposed that the income-test taper rate be aligned with that recommended for pension payments of 75 per cent, to “more appropriately target safety net payments”.
Under the new income test, a single person can still earn about $19,000 a year before losing access to Newstart.
The commission has also called for those older than 60 who are on working-age payments including Newstart, the Widow Allowance and Sickness Allowance to receive payment cuts. People older than 60 currently receive higher rates of assistance.
The changes would “make them consistent with those for other recipients”, the commission said. With the bulk of employment services provided through Job Services Australia due to expire next year, the commission recommended the government develop options to improve the structure of the job-matching system to lower average costs per jobseeker.