Locked into poverty

3 June 2021 | Posted In: #139 Winter 2021,

Australia’s social security net is failing to keep vulnerable families out of poverty, with researchers warning the child poverty rates for single-parent families is set to soar now that the coronavirus supplements have ended. Luke Michael reports.

A report from the Australian National University’s Centre for Social Research and Methods reveals that the coronavirus supplement — which effectively doubled unemployment payments last March — reduced the proportion of single-parent families living below the poverty line from 39 percent to 17 percent. But now the supplement has ended, ANU modelling estimates the child poverty rates for single-parent families will rise above pre-pandemic levels to 41 percent — even after factoring in the proposed JobSeeker increase of $50 a fortnight.

Social Ventures Australia (SVA) and the Brotherhood of St Laurence (BSL) — which commissioned the research — are now calling for increased income support levels to ensure children are not living in poverty in Australia. They point to ANU modelling that shows a 10 percent increase (around $12 billion) in welfare spending would slash the poverty rates for people on JobSeeker from 88 percent to 34 percent. This would give JobSeeker recipients an additional $190 a week and also allow for increases to the Disability Support Pension, and the parenting and carer payments.

Lead researcher Associate Professor Ben Phillips said this modelling provided the most cost-effective way of investing extra money into social security payments. “It clearly indicates that a modest increase in funding can make substantial reductions in the most severe forms of financial stress and poverty to those who need it most,” Phillips said.

BSL and SVA are also calling for an independent review into the structure and rates of social security payments to ensure children are not exposed to the long-term harmful impacts of poverty and financial stress. SVA director of early childhood Emma Sydenham told Pro Bono News the report was a stark reminder of the invisible discrimination that affected single-parent families in Australia.

“I didn’t really think that single-parent families would experience such discrimination. But this report really highlights that being a single parent today in Australia really does create a risk of consigning you to a life of poverty,” Sydenham said. “And that’s horrific. It’s something I think we need to have many more conversations about.” Sydenham said childhood poverty caused major social and economic harm, including increased costs in justice, health and welfare.

She noted 2019 research that found Australia spends $15.2 billion every year because children and young people experience serious issues requiring crisis services. “We spend billions of dollars on late intervention for children, so that’s on mental health costs, child protection costs, costs that really would be unnecessary if we invested early to support families and children to be able to thrive,” she said. “And we all miss out when people don’t have the opportunity to lead fulfilling, engaging and productive lives. So yes, there’s a cost to our justice system and our health system and our social welfare system, but there’s also a lot of opportunity as a country to draw on the capabilities of vulnerable people and I think that’s what we’re really missing out on.”

Sydenham added that achieving change in this area required getting the public on board so that governments can no longer ignore the issue. “Unless there’s strong public support I think it is really hard to get a significant shift on this,” she said. “But you can’t talk about early childhood development and strong outcomes for kids in Australia without talking about our income support system.”