The Morrison government has firmly opposed increasing Australia’s main unemployment benefit, despite calls to do so from within Coalition ranks.
Former prime minister John Howard has suggested the freeze on lifting the rate of the Newstart Allowance had “probably gone on too long”, while former Nationals leader and current backbench MP Barnaby Joyce, said living on the allowance would be “difficult, especially in regional areas”.
Labor has backed a review into the payment, with Shadow Treasurer Jim Chalmers telling reporters, “it is Labor’s position that Newstart as it currently stands is inadequate”.
When asked on Adelaide radio for his opinion, Treasurer Josh Frydenberg said Newstart was unlike other welfare payments in that “people who receive Newstart also receive other payments like the parenting payment, or rental assistance”.
“Indeed, over 90% of Newstart recipients receive those other payments,” he added.
So, are more than 90% of Newstart recipients receiving other benefits, including the Parenting Payment and Rent Assistance?
RMIT ABC Fact Check investigates.
Frydenberg’s claim is not the full story.
While almost all Newstart recipients — 99%— are receiving another benefit, for the majority the extra amount represents a relatively small addition to their Newstart payment.
According to 2017 figures provided by the Department of Social Services (DSS), the majority of Newstart recipients — 52%— were receiving so-called “other supplements”.
This refers to a raft of relatively small additional payments, providing recipients with an extra $14.64 a fortnight, on average. That’s around just $1 per day.
According to the figures, a further 28% of Newstart recipients were receiving rent assistance on top of “other supplements”, giving them, on average, an additional $110 a fortnight.
In making his case, Frydenberg referred to “the parenting payment”.
However, the Parenting Payment — designed to assist the principal carers of young children — is only available as an alternative to Newstart and not in addition to it.
Consequently, Frydenberg is not entitled to claim that Newstart recipients are also receiving the Parenting Payment.
Experts told Fact Check it was possible that Frydenberg was referring instead to the Family Tax Benefit, which is paid to parents.
The 9% of Newstart recipients who were also receiving this payment got an extra $388 per fortnight on average, or $415 once all top-ups were included.
A further 10% of the people on Newstart received both Rent Assistance and the Family Tax Benefit, with the total extra payment per fortnight, including all possible supplements, coming to $564.
What is Newstart?
The Newstart Allowance is the main unemployment payment in Australia.
It’s available to people between 22 and the pension age, so long as they are looking for work, meet an income and assets test, and are prepared to meet what Centrelink calls “mutual obligation requirements“.
A single person with no dependent children is currently eligible for a maximum of $555.70 per fortnight — not quite $40 a day.
Partnered people get less ($501.10 per fortnight), while older people who have been on Newstart for nine continuous months, as well as those with dependent children, receive more ($601.10).
Some principal carers with special circumstances are eligible for up to $776.10 per fortnight.
Newstart is indexed twice yearly, with increases in line with CPI coming into effect on March 20 and September 20. There has not been a real increase in the allowance since 1994.
Other payments for Newstart recipients
People receiving Newstart are eligible for various other payments.
All Newstart recipients are eligible for the Energy Supplement, which is designed to help meet energy costs. Newstart recipients can get up to $12 per fortnight.
Data provided by the DSS last year to a Senate standing committee, groups the Energy Supplement with a number of other supplementary payments that are available to Newstart recipients.
These include the Approved Program of Work Supplement, Carer Allowance, Language Literacy and Numeracy Supplement, Mobility Allowance, Pensioner Education Supplement, Pharmaceutical Allowance and Remote Area Allowance.
What about the Parenting Payment and Rent Assistance?
In making his claim, Frydenberg referred specifically to rental assistance and parenting payments.
Rent Assistance is available to people already receiving a government payments such as Newstart and who are paying at least $122 per fortnight in rent. The maximum rent assistance for a single person is $137 per fortnight.
The government benefit known as the Parenting Payment is made to parents of children younger than six (if partnered) or eight (if they are a single parent), and is subject to both income and assets tests.
However, experts confirmed that a person receiving Newstart could not also be receiving the Parenting Payment.
They told Fact Check it was likely Frydenberg was referring instead to the Family Tax Benefit.
Professor Peter Whiteford, of the Australian National University, told Fact Check: “Parenting Payment and Newstart are mutually exclusive — all income support payments are — so for the Treasurer’s statement to be correct he must be referring to Family Tax Benefits.”
Melbourne University Professor Roger Wilkins agreed: “[Frydenberg] is obviously talking about Family Tax Benefit.”
The source of the claim
Fact Check contacted Frydenberg’s office seeking a source for his claim. In an email, a spokesman sent a link to a fact check published by The Conversation titled “Fact Check: do 99% of Newstart Recipients also receive other benefits?“.
It is true that Newstart Allowance recipients almost always receive additional payments. But given the small nature of many of the additional payments to a large number of recipients, it is disingenuous to infer that the Newstart Allowance is considerably more generous than the headline figure suggests.
A Treasury spokesperson provided Associate Professor Phillps and Ms Joseph with publicly available DSS data as well as a list of supplementary payments for which Newstart recipients could be eligible.
That DSS data shows there were 723,000 people receiving Newstart in December 2018, but does not provide information on the number or proportion of Newstart recipients who were also receiving other payments.
What did The Conversation find?
Associate Professor Phillips and Ms Joseph analysed the Treasurer’s claim using the ANU’s PolicyMod— a microsimulation model able to provide a distributional analysis of welfare payments in Australia.
In an email, Associate Professor Phillips told Fact Check that PolicyMod used data from the ABS Survey of Income and Housing (2015-16), as well as the most up-to-date administration data.
“We use PolicyMod for a variety of reasons but the most obvious one is that DSS data that we have access to is very limited,” he said.
“As our analysis is based on survey data (with some benchmarking), it won’t be as accurate as the administration data. That said, our model is of sufficient quality that the general story is unlikely to change.”
Using PolicyMod, Associate Professor Phillips and Joseph found that all Newstart recipients would receive the government’s Energy Supplement, a fortnightly payment of at least $7.90 on top of the Newstart Allowance.
The proportion of Newstart recipients receiving the Family Tax Benefit — parenting payments available to those with dependent children — was 19 per cent. Meanwhile, around one in three received Rental Assistance.
The Conversation‘s fact check found that “about 57% of all Newstart recipients rely on the base Newstart payment and the Energy Supplement alone.”
The DSS figures
During Senate Estimates in March 2018, the DSS provided Greens Senator Rachel Siewert with a breakdown of the number and percentage of Newstart recipients receiving other payments as at June 2017.
Fact Check requested an updated breakdown from the department, but this was not provided.
Professor Wilkins confirmed that there is not readily available data for such a breakdown, but that the data provided to Senator Siewert would still apply now.
According to those numbers, just 0.7% of all Newstart recipients were receiving Newstart only, which means 99.3% were receiving some form of additional payment.
The department explained that the 0.7% represented the number of recipients who were not receiving the Energy Supplement.
“They are either new to payments and have not received their first instalment, or have been overseas for more than six weeks (Energy Supplement is not payable for absences beyond six weeks).”
What about the payments referenced by the Treasurer?
In making his claim, Frydenberg pointed specifically to the Parenting Payment and Rental Assistance.
As pointed out earlier, Newstart recipients are not able to receive the Parent Payment, and experts said it was likely Frydenberg was instead referring to Family Tax Benefit.
The June 2017 DSS data suggested that 52% of Newstart recipients were receiving what are labelled “other supplements”. These included the Energy Supplement — for which every Newstart recipient is eligible — but do not include Rent Assistance or the Family Tax Benefit.
The numbers show that in addition to “other supplements”, a further 28% of people on Newstart were receiving Rent Assistance, while 9% were getting the Family Tax Benefit. A further 10% were receiving both.
So, all up, 47% of Newstart recipients were receiving rental assistance and parenting payments via the Family Tax Benefit.
How much extra money is that?
The graph below breaks down Newstart recipients by the other benefits they receive.
You can see information on the average total extra payments made to Newstart recipients in each category by hovering over or tapping on the category.
For the 52% of Newstart recipients not receiving Family Tax Benefit or Rent Assistance, the average extra payment per fortnight is less than $15, or around $1 a day, according to the DSS figures.
Newstart recipients who are eligible for Family Tax Benefit, Rent Assistance and smaller supplements get an average of $540 a fortnight on top of Newstart. These recipients receive the most extra payments and make up 10% of all people on Newstart.
Principal researcher: Ellen McCutchan
- Sydney Morning Herald, ‘Freeze has gone on too long’: John Howard calls for dole increase, May 9, 2019
- ABC News, Barnaby Joyce joins calls to increase Newstart allowance, 18 July, 2019
- Josh Frydenberg, Interview with Leon Byner, Mornings, FIVEaa, July 18, 2019
- Department of Human Services, Newstart Allowance, 17 July, 2019
- Department of Social Services, Mutual obligation requirements for job seekers, 20 September, 2018
- The Conversation, Election FactCheck Q&A: is it true Australia’s unemployment payment level hasn’t increased in over 20 years?, 16 May, 2016
- Department of Human Services, Energy Supplement, 17 January, 2019
- Department of Human Services, Rent Assistance, 24 July, 2019
- Department of Human Services, Parenting Payment, 9 July, 2019
- Department of Human Services, Family Tax Benefit, 2 March, 2019
- The Conversation, FactCheck: do 99% of Newstart recipients also receive other benefits?, 17 May, 2019
- Department of Social Services, DSS Payment Demographic Data, 22 March, 2019
- Senate Community Affairs Legislation Committee, Answer to Question on Notice, 20 April, 2018