Report recommends parents receive welfare payments until their children are 22 years old

YOUNG people are set to be answerable to their parents for much longer under a radical new proposal. Here’s how it could affect you.

YOUNG people should have government benefits paid to their parents instead of their own accounts — until they turn 22 — under changes proposed to the welfare system.

A report into Australia’s social security system has suggested simplifying welfare payments and places responsibility for financial support of young people firmly on their parents.

The review led by Patrick McClure AO, noted that children were leaving home later, and suggested that if they were eligible for payments, this should be provided to their parents instead of being deposited into the young person’s account.

Currently students are generally able to access their own welfare payments once they are 18 years old, and younger if they worked full-time, have a child or are unable to live at home due to extreme circumstances.

The move to increase the age to 22, is part of a larger proposed overhaul of the welfare system, which could see 20 benefits restructured into five payments. This would see the dole become a tiered Working Age Payment. There would be a Supported Living Pension, means tested Child and Youth Payment, Carer Payment and Age Pension.

Greens senator Rachel Siewert said giving welfare payments to parents of anyone under 22 years old was an “unworkable” idea.

“This would be ridiculous for a 21 year old, who is allowed to drive, drink, vote, go to war, but is not allowed to access support properly,” Ms Siewert said.

You may have to dependent on your parents until you are 22 years old.

But during a speech at the Press Club today, Social Services Minister Scott Morrison said that vague statements expressing empathy but not offering solutions would not help fix the budget.

“The budget needs repair,” Mr Morrison said.

When asked whether plans to make under 30s wait six months for unemployment benefits was still on the table, Mr Morrison replied that every measure stuck in the Senate was still on the table.

“So if something is coming off the table, something is coming on the table.”

He would not confirm whether changes recommended in the McClure Review of Australia’s Welfare System would be considered something “coming on the table”, but made it clear that the report simply provided recommendations to government.

The McClure report said that in setting the age of independence as 22 years old, the key determining factor was the “extent to which families should provide financial support to young people while they complete their education and transition to work”.

Patrick McClure with Minister for Social Services Scott Morrison and the McClure Report into Welfare Reform at Parliament House in Canberra.

It also noted that an increasing number of young people were living at home for longer. In 2001 only 33 per cent of people aged 22 were still living at home, and this had climbed to 40 per cent in 2011

Meanwhile, the unemployment rate for young people in August last year was 13.6 per cent, double that of the overall rate of 6.1 per cent.

However, there was not much detail on how the new system would work and under what exact conditions a young person could be considered independent. It gives general examples including if they were a parent, or were unable to live at home.

Mr Morrison also deflected questions about how the scheme would work, saying it was not a proposal from government.

Currently, children are considered “dependent” on their parents until they are 22 years old, but this only determines whether their Youth Allowance eligibility is assessed based on their parent’s income, or on their own.

While the report did not recommend any specific rates of pay for the new Child and Youth Payment, it noted that “nobody moving from the old system to the new system would have a reduction in their rate of payment”.

Mr Morrison has said that it was important funds supported those that needed it and those who paid for it were respected, noting that the contribution of eight out of 10 income taxpayers was being used to pay for the welfare system.

“Of the 10.1 million Australian income taxpayers eight million pay that tax so that we can fund the $150 billion welfare bill this country carries,” Mr Morrison said in an earlier statement.

“If Australia keeps going this way it will inevitably reach 10 out of 10 income taxpayers.”

RECOMMENDATIONS

* Under the plan there would be a tiered working-age payment, supported living pension, child and youth payment, carer payment and the age pension.

* Young people won’t qualify for welfare payments until they reach age 22.

* Savings would come from fewer people moving to the disability support pension, and ensuring at-risk youth were prevented from the cycle of welfare dependency under an early-intervention program.

* People with a disability, parents, carers, students and the jobless would get a tiered working-age payment recognising their ability to work.

* Those with a more severe disability who cannot work more than eight hours a week would get a supported living pension.

* A means-tested payment would be paid to parents or guardians with kids under 22, with this conditional on regular immunisations and school attendance.

* A means-tested payment for carers.

* No change to existing age pension payment.

* Supplements for housing, child and family, education and carer and disability costs.

* No reduction in the value of payment rates.

* A “Passport to Work” that ensures no disincentives to work if employment hours change and ensures retention of concession cards.