Welfare cuts may leave 500,000 young people in need of emergency aid: Department of Social Services

Updated

Treasurer Joe Hockey says $230 million in emergency relief payments for young people who have their dole withheld under new budget measures are part of the Government's "huge" safety net.

Last night a Senate estimates committee heard more than 500,000 people under 30 may require some form of financial assistance in the next four years because of the budget's changes to unemployment benefits.

The Department of Social Services told the committee the budget included almost $230 million to help people with food, utility bills and other essential services.

The Government wants to withhold payments from under-30s for up to six months in a bid to prevent young people becoming entrenched on welfare and provide greater incentive to find work.

The move, one of the most controversial in the budget, is being badged by the Government as an "earn or learn" initiative.

Mr Hockey says the emergency relief payments will be managed by non-government organisations.

"We're putting a huge number of safety nets in place - we hope none of the safety nets need to be used," he told Sky TV.

"But we're not going to leave people to fall to the bottom without a chance to get back."

Labor is set to vote against the measure - as are the Greens - and Opposition Leader Bill Shorten says the emergency payments reveal just how "cruel" the policy is.

"This is the policy equivalent announcement of saying - give every passenger a parachute because they know the plane can't fly or may be in trouble," he said.

"Why on earth is this Government so mean and so keen to divide this country that they want to create a problem which they're then going to have to spend more money solving?"

Safety net 'proves budget will force people into destitution'

Greens Senator Rachel Siewart says it proves the Government knows the budget cuts will force more young people into destitution.

"I think it shows they know these measures will force people into crisis situations, it will cause significant financial hardship, it will put people into poverty, and that they need to provide some funding for emergency relief services to go some way towards addressing that," she said.

She said people living on Newstart did want to find work.

"In all the work that I've been doing, I have not met one person who has said to me, 'I'm really happy living on Newstart, I really want to stay here living in poverty'.

"We need to be making sure that we are providing the support to overcome barriers to employment, and [providing] the appropriate training that enables people to find work."

The Australian Council of Social Services has called on the Government to dump the entire policy.

"Frontline agencies working with young people looking for work have made clear that depriving young people of payments and employment services will make it tougher for them to get ahead, especially those with no family support or from in families living on low incomes," ACOSS CEO Cassandra Goldie said in a statement.

I think it shows that they know that these measures will force people into crisis situations. Greens Senator Rachel Siewert

Last night, Serena Wilson from the Department of Social Services told the hearing the Government was budgeting for an increase in emergency relief.

"So it's about essential, essential needs and we've estimated that around 550,000 job seekers would access that assistance," she said.

The Government is struggling to get the Senate votes to introduce the scheme.

But if it begins as planned next year, it is estimated about 60,000 people may be forced to wait for payments, and that figure does not include those who will qualify for a range of exemptions.

The department's Cath Halbert says with existing waiting periods the longest someone could go without payments is actually 11 months.

"The usual amount would be six months, possibly with reductions for previous work history, but there will be some people who are affected by more than one waiting period."

Senator Siewert challenged Ms Wilson about the affect the measure might have on a young unemployed couple with children. Only one would retain a welfare payment unless the other took up training.

Rachel Siewert: "This is worse than ... cutting single parent payments in a way because you're going to have at least three or four people living on Newstart." Ms Wilson: "So payments in respect of the children, rent assistance if they're eligible, et cetera, would continue, Senator." Senator Siewert: "You tried living on that? Two adults and a couple of kids." Ms Wilson: "No I haven't, Senator." Senator Siewert: "No." Ms Wilson: "I think it would be very difficult."

Budget measures 'will put people into poverty'

Ms Wilson acknowledged the department cannot yet say what impact the policy may have on housing stress and homelessness.

"We are unable to predict in a way the specifics of that because this measure hasn't started but it is [a] risk," she said.

The department says it will begin consultations about the policy next week.

Topics: government-and-politics, federal-government, social-policy, budget, welfare, australia

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