ANZASW Statement on the Benefit Increases

Yesterday (Sunday 28 February 2021), Carmel Sepuloni, Minister of Social Development and Employment announced that benefits will increase by 3.1 percent as of April 1, 2021. These increases are in line with the rise in average wage.

This follows an earlier announcement (made on February 16, 2021) that those receiving benefit support will be able to earn more through work before their benefit payments are affected from April 1, 2021. This will ultimately mean that around 82,000 low income earners will be better off by an average of $18 per week.

Currently, a person on job seeker support can earn up to $90 per week before their benefits start to reduce. People on Sole Parents and Supported Living Payments are able to earn up to $115 per week. The new changes will mean that people are able to earn up to $160 per week before their benefit payments will be affected.

Sepuloni explained “increasing the abatement thresholds will make it more worthwhile for people to work and improve the financial incentives to work part time. It also means that people facing reduced hours, say due to Covid-19, may more readily access financial assistance while staying in their job.”

“Part time work is an important step for people moving from a benefit back to full time work. It helps to build and maintain skills, experience and self-confidence and keeps them connected with the workplace.”

ANZASW strongly supports any move to increase benefit rates or changes to systems that enable low income earners to more easily access assistance if and when required. However, the changes outlined above represent very minimal improvements for those affected.

Benefit rates still fall significantly below minimum wage and even more so below living wage and will continue to do so after the April 1 changes are made. For example, currently a person earning a minimum wage salary (based off a 40-hour week) will earn $39,417.84 before tax (this will increase to $41,712 from April 1). The basic sole parent benefit plus accommodation allowance is $25,922.36 for renters and $27,173.80 for mortgage holders. It is unacceptable to expect people to live off an income so far below the minimum wage.

ANZASW supports the call that the Government must implement the recommendations of the Welfare Expert Advisory Group (WEAG) report, particularly the recommendations in the sections relating to Benefits, Working for Families and Supplementary Assistance.