Budget 2017: foreign citizens get $15bn in welfare

About 870,000 non-citizens are claiming $15bn a year in welfare benefits, according to a new analysis.

Liberal Democratic Party senator David Leyonhjelm. Picture: AAP

About 870,000 non-citizens, mostly from Britain, New Zealand, Africa and the Middle East, are claiming $15 billion a year in welfare­ benefits, according to new analysis by the Parliamentary Budget Office, raising questions about the generosity of Australia’s social security system.

The analysis, requested by Libera­l Democratic Party senator David Leyonhjelm, estimated that 710,000 non-citizens from nations with which Australia has no social security arrangement, includ­ing Britain, Vietnam and China, claimed an average $17,500 each annually in welfare, totalling 83 per cent of the $15bn total.

“At present, around 2.5 million (non-citizens) live in Australia and are eligible for welfare,” said Senator Leyonhjelm. “While I believe refugees should continue to be elig­ible for welfare to help them find their feet, the vast majority of non-citizens are not refugees and should not require handouts.”

More than 150,000 non-citiz­ens from countries with which Australia does have a bilateral agreement, such as New Zealand and India, were estimated to claim $15,500 a year each, making up the remainder of the total.

Eligibility for pensions, allowances and family tax benefits is based on residence rather than citizenship. Eligibility for the Age Pension, Australia’s biggest welfare payment, requires a minimum of 10 years’ residency.

John Wanna, a professor of public policy at Australian National University, said Australia was one of the most generous countries in the OECD for payments to non-citizens. “We’re one of the few in the OECD where somebody who doesn’t work can go straight on to benefits,” he said, noting that in Europe access to social insur­ance was often predicated on prior ­contributions.

British citizens made up the largest share of the total, at 170,000, followed by Africa and the Middle East (90,000) and China (50,000). “Before 1949 everyone here was simply a British subject,” said Professor Wanna. New Zealanders who arrived before­ 2001 are eligible for welfare.

The government has recently tightened eligibility for skilled temporary visas and citizenship, paring back eligible job categories and toughening English-language and residency requirements. “Citizenship still doesn’t really give you that much; a lot of people in Australia still vote who aren’t citizens.”

Senator Leyonhjelm said limiting welfare to citizens “will discourag­e those with poor job prospects from coming to Australia, and will build support for immig­ration within the Australian community”.

Social security and welfare is the largest area of government spending, projected to grow from $158.6bn this financial year to $191bn by 2020.

The new figures “represent the total number of adult welfare recipients affected by limiting welfare payments to only Australian citizens, except where a reciprocal social security agreement is in place with the non-citizen’s home country”, the PBO said in its costing. “It includes both those who would have their total transfer income­ reduced and those who would lose all of their transfer income­.”

The PBO excluded payments to non-citizens from countries where expatriate Australians would receive similar payments, mainly age and disability benefits, as a result of bilateral agreements. A deal struck with New Zealand last year gives Australians access to age and disability benefits. Thirty international social security agreements allow Australians “to claim payments from other countries where they have spent part of their working life”.