2017 Federal Budget: Treasurer drives demerit system to cut off payments of welfare cheats
EXCLUSIVE: Bludgers will face a driver-style demerit system in the Federal Budget which will cut off their payments for up to a month when they lose all seven points.
NSW
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BLUDGERS will face a driver style demerit system in the Federal Budget which will cut off their payments for up to a month when they lose all seven points.
Welfare recipients who take taxpayers for a ride by failing to turn up to job interviews or work-for-the-dole appointments will start losing payments when they reach four points — and when they hit seven demerit points, they will have their payment cut-off, effective immediately for four weeks.
But some welfare bludgers who commit serious offences will lose their seven points in one fell swoop.
The Turnbull Government will today announce the tough demerit system as one part of major welfare sector reform, that includes scrapping the Newstart allowance, combining it with other payment categories, and rebadging it under a new name to simplify the complex system.
Treasurer Scott Morrison’s budget will show debt at record levels, climbing beyond $500 billion, with the Treasurer pledging restraint by keeping spending growth to around 2 per cent.
Mr Morrison will walk away from many of Tony Abbott and Joe Hockey’s 2014 budget measures, that were deemed unfair, and will be conservative with revenue forecasts, given the volatility of iron ore prices.
Mr Morrison will pitch his budget as built around fairness, focusing on building the economy to secure more and better paid jobs, guaranteeing the essential services that Australians rely on, putting downward pressure on cost of living and bringing the budget back to balance.
Major welfare sector reform is designed to stop recipients taking taxpayers for a ride, with a focus on bludgers who are capable of working but refuse to turn up to job interviews, contributing to the exploding cost of welfare.
The annual welfare bill is expected to climb from $160 billion this year to more than $277bn by 2026, if no changes are made.
The new seven-point system will be split into two phases, an initial four-point phase and a second three point phase.
When a welfare recipient accumulates three points, they will have to attend an interview to discuss their situation and will receive a warning, in keeping with the Budget’s theme of fairness.
At four points, recipients will start losing their welfare payments and at 7 points, they will be cut off entirely.
Some serious offences will mean a welfare recipient will go straight to the intensive compliance phase of an four-week payment cut to take immediate effect.
But the scheme will focus on ensuring vulnerable people get the help they need.
It will be similar to the NSW drivers’ licence demerit scheme — where drivers who break the law by speeding or talking on their mobile phone lose points, culminating in loss of licence when all 12 points are gone.
Under the new scheme, welfare recipients in jobseeker mutual obligation schemes like Youth Allowance and Newstart, will lose points if they fail to attend work, a job interview or other crucial appointments without a reasonable excuse provided ahead of time.
The scheme will slam shut a waiver measure, introduced by Labor, that became a loophole for those on welfare to get out of job appointments if they called to reschedule in the weeks afterwards.
The crackdown will spark a serious fight with welfare advocates.
Australian Council of Social Service chief executive Cassandra Goldie said the government was “way off track” and its measures were likely to be “simply cruel and neglectful”.
“We don’t have a big problem with social security compliance; the government already has extensive powers in this area,” she said.
“If a person is giving up, then that should worry us and we should reach out and assist that person, not punish them.”
“The big problem is that there are not enough jobs available.”
There has been a particular focus on removing welfare recipients who are “gaming” the system, with government data showing more than 20,000 jobseekers are turning up to Centrelink appointments just to get paid.
Many of these are men, aged 18-30 years old.
The Daily Telegraph revealed in April that only 2213 of the 32,625 welfare recipients who incurred penalties for skipping job interviews and work-for-the-dole appointments — less than seven per cent — were actually served with financial sanctions in the 12 months to September 2016.
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It’s understood Social Services Minister Christian Porter will attempt to convince key crossbencher Nick Xenophon, who controls three votes in the Senate, the new arrangement is less harsh than a previous proposal to force unemployed people to wait four weeks before getting the dole. That measure, which would have saved $173 million, had the support of Pauline Hanson’s One Nation — and had been watered down from six weeks first proposed in the Abbott government’s first budget.
Other welfare data shows the total lifetime bill for the 4370 young parents under 18 receiving parenting payments is expected to be $2.4bn.
Those young parents are expected to access some form of income support in 45 separate years over their lifetime.
The cost of 400,000 people receiving student payments in the last year was $3.3bn — nearly 30 per cent are expected to be receive some form of payment in any year over the next six decades.
Government analysis has shown an average Australian has to work fulltime for 15 months to pay enough tax to keep someone on the dole for a year.
Originally published as 2017 Federal Budget: Treasurer drives demerit system to cut off payments of welfare cheats
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