Giving young unemployed people access to the dole for only six months of the year could lead to an increase in crime and poorer working conditions, welfare groups have warned.



The Abbott government’s first budget outlined changes to Newstart and Youth Allowance for unemployed people under 30 that will see them receive no income support for six months at a time. People under 25 will not be eligible for Newstart and will instead have to claim Youth Allowance, which is about $100 less a fortnight.

Unemployed recipients of either payment will only be able to claim it for six months at a time while on the work for the dole program and will then be cut off for six months before receiving income support again.

But despite government claims that youngsters will be able to access emergency payments if they experience financial hardship while not receiving income support, welfare groups have blasted the changes, saying a safety net is being ripped away. They questioned how people are supposed to live for six months at a time without income.

The treasurer, Joe Hockey, defended the changes, saying there were still safety nets in place. While speaking at the National Press Club on Wednesday, he was given the scenario of a 25-year-old tradesman made redundant with no savings or family support and asked how such a person would feed himself for six months.

He responded saying if the tradie was not given a redundancy payout he would have access to the Fair Entitlements Guarantee scheme which gives people taxpayer-funded redundancy payouts of up to $39,216. The scheme has strict eligibility criteria including that the employer must be declared bankrupt or liquidated.

“After you get the redundancy you go into a Centrelink office you will able to have the six-month waiting time reduced by a month per year that you have worked,” Hockey said. The maximum reduction on the waiting time is five months.

“In addition, we will help you get into a job, we’re going to be active about it, helping you go into a job placement program,” he said. “Now that’s important.

“But the best thing we can do is create an environment where another job is available, where there’s an employers looking for an employee. That’s the best solution, that’s the best hope.

“But if that person wants to go and retrain, do a diploma, we’ll provide a taxpayer-funded concessional loan. It’s pretty good. If they want to do another apprenticeship we’ll give them $20,000 through a taxpayer scheme to do that. Because we want them to earn or learn. Earn or learn. But there are safety nets in place.”

Emma Robertson from the Australian Youth Affairs Coalition said the changes could lead to a rise in crime and employers taking advantage of young workers.

“The message to young Australians is really clear and that message is, ‘You’re now on your own,’ ” she said.

The youth unemployment rate is now 12.8%, more than double the national rate of 5.8% and Robertson said if the national rate rose the youth rate would only rise too.

“How do people support themselves if they have no income, no access to income and their families can’t afford to help? There’s not anything on offer there that’s legitimate or legal,” she said.

She said a surge in crime could be one of the consequences. “I also think it leaves young people really vulnerable in the workforce, it might lead to them taking jobs where they’re not paid legitimately, they’re being exploited in the workplace but they’re forced to do it because they won’t be able to survive otherwise,” she said.

Robertson said older Australians were being asked to support their children for longer while working until they are 70 under changes to the eligibility for the pension.

A spokeswoman for social services minister, Kevin Andrews, said if people found themselves in “extreme hardship” while without an income for six months they could apply to Centrelink for emergency assistance or a referral for further support. The Special Benefit is now available to people who prove extreme hardship and is the equivalent of Newstart or Youth Allowance.

“Newstart and Youth Allowances are not meant to be permanent payments. They are temporary payments to support people while they find a job,” the spokeswoman said.

“Introducing a six-month waiting period and time limits on income support payments will give young people a stronger incentive to earn or learn. During the waiting period, jobseekers will have access to a full range of supports to help them become work-ready, such as access to employment services, relevant training or relocation assistance to move to a stronger jobs market.”

People exempt from the six-month waiting period for unemployment benefits are those in full-time education, people assessed as being unable to work more than 30 hours a week, a single parent receiving the family tax benefit, a part-time apprentice, principal carer parent and people eligible for disability employment services.

Gerard Thomas, of the Welfare Rights Network, said putting time limits on payments was an Americanisation of Australia’s welfare system.

“This is an old-fashioned budget of bashing unemployed, young people, single parents, and old people as well,” he said.

Thomas said charities would be forced to feed, clothe and house people who lost their income support for six months at a time.

