The Abbott government has ditched its proposal to take people under 30 off income support for six months at a time at a cost of more than $1.8bn to the budget’s bottom line.
The plan, one of the flagship policies of the 2014-15 budget, was initially put down as a $1.2bn saving but, because of forecasts of increased unemployment, the cost of walking away from the policy is estimated in the budget as $1.8447bn.
One of the only echoes of the previous budget is a commitment to delay people under 25 from receiving unemployment benefits until they have spent four weeks actively looking for work.
But the budget signals audits of Australia’s welfare system, with $20.7m allocated over four years to develop reports into what the government describes as “detailed annual valuation of lifetime liability of Australia’s welfare system”.
The government will also stop some people on the age pension, wife pension, widow B pension and disability support pension from going overseas for more than six weeks and continuing to receive benefits. The move will save the government $168.6m over four years.
Income management, in which unemployed people are given some of their income support on an electronic card they can only spend on certain items, received a boost in the budget with $146.7m over three years to continue it in areas where it is already being used and a further $2.7m to engage communities about introducing income management in their areas.
The government will delay its proposal to increase the age of eligibility for Newstart from 22 to 25 at a cost of $170m over five years, with it now scheduled to be introduced on 1 July 2016. The low income supplement, part of the carbon tax compensation introduced by the previous Labor government and kept by the current government even when the carbon tax was scrapped, will be ditched. It allowed for people to claim up to $300 a year if they could prove they had not been compensated for the carbon tax in other ways.
More than $100m will be spent on programs and not-for-profit organisations to improve employment, educational and social outcomes for parents and young people who are unemployed, have a mental health condition or are refugees or vulnerable migrants.
The figure includes $55.2m for up to 40 trials to identify and engage with disadvantaged youth, $19.4m to help people under 25 with a mental illness get a job and $22.1m over four years to support young refugees.
Money from the social services budget is also being spent upgrading computer systems and catching welfare cheats, with $60m to be spent on new technology. The government forecasts it will save $1.5bn by increasing the capability of the Department of Human Services to detect, investigate and deter welfare fraud.
