Eva Cox to Bill Shorten: stigma, disincentive, ineptitude & nastiness implementing Newstart and parenting payments

Picture at left is from here.

Eva Cox has written to-day to Bill Shorten.  

I receive the Aged Pension.  I am about to get a rise in the pension.  I can do with it.  However, I am embarrassed and sad.  As I get more, the Newstart people get a rise that borders on the infinitesimal and single mothers who are not in the workforce (as if it is so darn easy to park the kids and get off to work!) will have money taken away from them when the children reach a particular age to 'encourage' them to work.  I'm old enough to remember the outcry from women in this country that single mothers - women with children unsupported by a male bread-winner - be allowed to receive social security payments.  

My mother-in-law was widowed twice by the time she way 38 years of age - and each marriage produced two children.  My husband was the eldest.  His mother used to make pies and my husband used to sell them door to door getting around on a push bike.  There was real poverty in this household.  A household with a working mother, undoubtedly.  

Anyway, let's hear from Eva.....

18 Mar 2013

Dear Bill Shorten

By Eva Cox

Bill Shorten

Is Bill Shorten sincere about addressing changes to a welfare system "so stupid" that it can't support payments for sole parents? Eva Cox suggests that the policy itself is what's causing the grief

Dear Bill,

When Wendy Tucker asked you on Q and A whether sole parents’ benefits were targeted because single mums are "simply the easiest to take down", your apparent sincerity suggested that you might take the problem seriously. "I cannot believe that … this system is so stupid we can’t alleviate your concerns," you said.

However, your best efforts so far suggest that you haven’t recognised that the policy itself, not its implementation, is the cause of sole parents’ dismay.

To quote from your staffer, Steve Michelson’s letter to a constituent:

"I appreciate the time you have taken to bring your concerns to the Australian Government’s attention. The Government understands the difficulty many parents, especially single parents, face caring for their children while on income support."

No, your government doesn’t, or you wouldn’t have brought in the appallingly designed cuts to sole parent payments, which are not able to meet the intentions you claim below:

"Newstart Allowance is designed to provide a balance between financial support and incentives to find and maintain employment. Transitioning parents onto Newstart Allowance creates better incentives for parents, including single parents, to return to the workforce and recognises that most parents’ capacity to undertake work or other activities increases as their children get older."

There are two assumptions in this claim. First, that Newstart offers adequate support — an idea considered laughable by almost everyone but Cabinet. Second, that Newstart offers better incentives to return to the workforce.

The basic payment is considerably lower; the allowable earnings before a 40c withdrawal rate is applied are much less than on parenting payments; and most of the obligations on recipients and support on offer were there before the change. You have also cut support for new studies!

"Better incentives" ignores your own DEEWR statistic that 60 per cent of the transferred sole parents already were in paid work. Most lost over $100 per week and some lost all support, because they were earning too much. For some of them, the incentive was perverse; to give up employment because the loss of weekly income and valuable concessions made it even harder to balance time and money demands.

To say sole parents will be able to earn $400 more a fortnight is again misleading. It does not refer to parenting payment earnings but the appallingly mean means test for other Newstart recipients — which does discourage employment.

In fact, your own statistics show fewer people on Newstart are earning than those on parenting payment. This would suggest that Newstart itself is a disincentive. Perhaps starving people into paid jobs doesn’t work after all!

The new benefits are available to all allowance recipients, not just sole parents, as is the tax free threshold and other payments and services you mention. $4 per week does not compensate for losing $62.

"Parents can meet their participation requirements in several ways, including by looking for part-time work of at least 15 hours per week or by undertaking part-time employment, study or voluntary work (in some circumstances) for 30 hours per fortnight. Parents are also able to undertake a combination of activities, for example part-time work and study, to meet their participation requirements."

Two basic facts are ignored here. The first is that parents on parenting payments who had complied by taking on 30 hours paid work per fortnight now have had substantial cuts to their income.

Some now find their net income doesn’t cover basic expenses of going to work plus weekly spending but they are no longer eligible to be registered as job seekers. This makes no sense. Neither does including another nearly 20,000 sole parents who are again not registered to look for jobs because of other reasons, as will be shown below.

The Government removed this arbitrary distinction from 1 January 2013 to provide greater equity and consistency in the Parenting Payment eligibility rules by ensuring that all parents are assessed the same, regardless of when they first claimed income support.

Here the letter raises the equity issue. Some 40,000 sole parents had already been transferred from parenting payment to Newstart since the change came in July 2006. So equity for your government means reducing all sole parents with children older than eight to the lowest common denominator.

As there is no clear evidence that earlier changes increased the workforce participation of sole parents affected, this is impossible to justify. The most recent ABS data showed the annual employment rates of sole parents from 2005-2011, which rise and fall in ways that cannot be correlated with the policy changes, let alone validate any claim for causality.

A fairer equity policy would be to move the 40,000 sole parents who have been on Newstart longer back onto Parenting Payments as well as the 67,000 who have more recently been cut. Then they would have a basic frugal income that recognised their important job of caring and would be effectively encouraged to engage in job seeking and training.

These sole parents were obliged to look for paid work when on parenting payment as their child turned six, so there was no change when they were transferred to Newstart. The 40 per cent who have not been successful in finding appropriate jobs that fit around school hours are facing the job scarcity, longer commutes, biased employers and wider prejudices based on age and lack of recent experience.

Probably close to 20,000 sole parents have additional carer responsibilities for children or other adults, or significant health and personal problems. There are also some older recipients and others who are doing voluntary work as they are having particular difficulties even applying for jobs.

It is inept at best and nasty at worst to push all of these diverse groups onto a payment that is widely seen as inadequate and that does not, according to available evidence, encourage or sustain additional workforce participation.

Sole parents should be entitled to income support payments that allow an appropriate mix of adequate paid working time and time to be a good sole parent. Workforce data show that as their children get older, sole parents do re-enter the workforce for longer hours. It is not necessary to persecute them in this way to save limited funds at the expense of an already stigmatised group.

I hope that this policy isn’t just another silent dog whistle to tout conservative tendencies.