Crossbencher Rebekha Sharkie and welfare groups say plan would disproportionately affect older people and discourage saving

This article is more than 1 year old

This article is more than 1 year old

A government plan to force people with more than $18,000 savings to wait up to six months before accessing welfare benefits will struggle to pass parliament, with key crossbencher Rebekha Sharkie slamming the move as “shortsighted” and “mean”.

Welfare groups have also rounded on the proposal, saying the measures will make life more difficult for people – particularly older Australians – struggling on welfare.

The Coalition has revived a welfare payment integrity bill that lapsed in the previous parliament which extends the so-called “liquid assets test waiting period” from 13 weeks to 26 weeks, and cuts off the pension for people who spend more than six weeks overseas.

Stopping the payment of pension supplement after six weeks overseas saves the government $154m, while changes to the liquid assets test waiting period save $105m.

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It is one of a suite of measures being revived by the Coalition as part of its “compassionate conservative” welfare agenda, which includes the drug testing of welfare recipients and an expansion of the cashless debit card.

The government is pushing ahead with the failed measures while resisting widespread calls for an increase to the Newstart payment, which is currently $560 a fortnight.

Sharkie, the welfare spokesperson for Centre Alliance, which controls two Senate votes, said she did not support the measures that would disproportionately affect older people.

“All you are doing is actually increasing the vulnerability of life for people, and particularly for older Australians,” Sharkie told Guardian Australia.

“It is hard to understand why the government is doing this, there is certainly no evidence to suggest that this will magically move people off Newstart.”

Sharkie said the asset test would discourage people from creating a “nest egg” and said the pension changes would punish Australians who travelled back overseas to look after elderly relatives.

“I just think these are mean-spirited plans by government and now they are making such a big deal of us running a surplus budget, where is the need for these cuts from the most vulnerable?

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“I think it is ideologically based, it certainly can’t be based on evidence and good policy [and] I think it is a distraction to keep advocates busy trying to fight this wave of legislation rather than lobbying for an increase to Newstart.”

Without the support of Centre Alliance, Labor and the Greens, the government will need to secure the support of One Nation, Cory Bernardi and Jacqui Lambie, but Lambie is yet to be convinced.

St Vincent De Paul Society’s national council chief executive, Toby oConnor , said the government appeared to be sending a message that discouraged self-reliance.

“We think that Newstart is already tough for people to survive on and clearly this bill will make life more tough for folk,” oConnor told Guardian Australia.

He said the measures could contribute to poverty and financial instability by forcing people to deplete “modest savings”, or to go into debt before being able to access income support.

According to the government, it is estimated that about 10,000 people each year would incur an additional waiting period of one to 13 weeks under the proposed changes.

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Currently, a single person with no dependents incurs a waiting period with $5,500 in cash savings or shares. A 13-week wait time applies from $11,500 or more. A couple or parent incurs a delay from $11,000, with the maximum 13-week period applying from $23,000 or more.

Under the new rules, the six-month waiting period would apply for a single person with $18,000 or more, or $36,000 for a couple or parent.

A spokesperson for social services minister Anne Ruston said the government was focused on “managing taxpayers’ money responsibly and maintaining the sustainability of the welfare system”.

“Australians expect people to use their own financial resources to support themselves before they call on taxpayer-funded welfare.”