Young people to lose access to unemployment benefits as part of welfare reforms

YOUNG people will be stripped of their unemployment benefits as part of Newstart reforms, which will force them to wait until they turn 25.

People aged under 25 won’t be able to get Newstart allowance under planned changes introduced to parliament today.

YOUNG people will not be able to get unemployment benefits until they turn 25 under reforms introduced by the Turnbull Government today.

The coalition has unveiled wide-ranging welfare reforms in parliament today, including changes to the Newstart program.

It hopes to stop people aged 22 to 24 getting Newstart or the Sickness allowance, and they will instead be shifted to the Youth Allowance payment.

This will reduce the amount of money that they will be able to get, costing a single person living away from home about $90 a fortnight.

They will also be required to study in order to qualify for the payments.

“The key aim of this measure is to provide incentives for young unemployed people to obtain the relevant education and training to increase employability,” according to an explanatory memorandum for the bill.

However, it says Youth Allowance does allow students to earn a higher amount of money from part-time or casual work than Newstart, before this begins impacting their payments.

Students can also have up to $10,000 in the bank before their savings affect their payments.

But young people will also be forced to wait a month, and made to complete a compulsory program before they can get any payments.

The changes would be grandfathered so that 22, 23 and 24-year-olds already receiving Newstart can continue to do so.

They are part of a number of budget-saving welfare measures unveiled by the Turnbull Government today, which it hopes to get passed through parliament.

CHILD CARE CHANGES

Parents will finally get more help with childcare fees three years after the federal government first laid out its plans — as long as a new push to convince parliament is successful.

Prime Minister Malcolm Turnbull has labelled the planned changes “a very big social reform”.

More than 843,000 families have children in some form of child care.

The plan to scrap the existing complex system of payments and establish a single-fee subsidy is unchanged from what the government proposed in May 2015.

But the government has rejigged the welfare cuts it plans to use to inject an extra $3 billion into childcare subsidies, in an omnibus bill it hopes will be more palatable to crossbench senators.

If the legislation passes in the first half of the year, the new childcare subsidy will start from July 2, 2018.

It would be means-and activity-tested, giving families between 85 per cent and 20 per cent rebate on childcare fees.

One key change is scrapping the existing $7500 cap on rebates for families earning less than $185,000.

Changes to child care and parenting payments have been proposed.

Education Minister Senator Simon Birmingham said that meant an extra 90,000 families would have their fees subsidised for the entire year instead of facing several months of “a horror for budgeting” when their costs suddenly doubled.

Another 40,000 families on high incomes will have that cap lifted to $10,000 a year.

Labor childcare spokeswoman Kate Ellis complained the government had not done anything to fix problems the sector had raised regarding the activity test and uncertainty for indigenous and rural care services.

However, key crossbench senator Nick Xenophon said the reworking of the cuts was a step in the right direction and the childcare package was improved.

CHANGES TO PARENTING PAYMENTS

To pay for the changes the government will phase out Family Tax Benefit A end-of-year supplements but increase fortnightly payments by about $20.

“I suspect even Labor might have a look at this bill because it does all of the things that Australian families are crying out to have,” Social Services Minister Christian Porter told reporters.

But Labor has said it will not support cuts to family tax benefits.

“We think the government is going to hurt millions of Australian families with these cuts,” Opposition families spokeswoman Jenny Macklin told reporters in Canberra.

Families on FTB A would be $200 worse off for each eligible child, and those on FTB B would be $350 a year worse off as a family.

An earlier move to scrap end-of-year payments for Family Tax Benefits A and B to pay for the child care measures was blocked in the upper house.

The government has now agreed to increase fortnightly family tax benefit payments by about $20 to compensate families for the loss of their annual supplement.

PAID PARENTAL LEAVE

The 70,000 new parents who have a child each year, may have to consider going back to work earlier with the government wanting to cut paid parental leave payments.

Currently the government provides 18 weeks’ leave paid at the minimum wage ($11,826) to new parents earning less than $150,000, and this is on top of any leave provided by their employers.

Last year the Turnbull Government tried to change this so that parents could only use government payments to top-up their work leave to a maximum of 18 weeks. It has now boosted this to 20 weeks.

It means that a new mother who gets 10 weeks of leave from her employer, will only be able to get an extra 10 weeks paid by the government for a maximum of 20 weeks leave.

The changes will not start until nine months after the bill passed, so women who are already pregnant don’t miss out.

CHANGES TO THE PENSION

Seniors living overseas would have their aged pensions cut off after six weeks, down from 26 weeks

New pensioners will also lose the right to get the $14-a-fortnight energy supplement.

Those who started receiving it before 20 September 2016, will still get the payments but those who got it on that date or afterwards, will only get the payment until 19 September 2017.