Late last year, the United Nations’ Human Rights Council expressed its concern that moves to push sole parents onto a lower paid income support may breach our responsibilities under a number of human rights treaties.
The Council requested information on why the changes are happening and whether they are warranted. To date, it has not received a response.
But statistics now available suggest the government may not be able to justify the changes. The biggest financial losers of this policy are sole parents who are already in part-time work.
The ALP Government claims that moving 110,581 sole parents onto lower income support payments when their youngest child turns eight will push them into paid jobs. However, 60% of those to be impoverished are already in part-time paid work and will lose more than $100 per week, as is shown in the example below.
Also, similar cuts imposed on 40,000 more recent sole parents since 2006 have already failed to increase their paid work involvement. So why continue this policy?
The most recently released five-year ABS data from 2005-2011 showed the annual employment rates of sole parents rise and fall in ways that cannot be correlated with the policy changes, let alone permit any claim for causality.
Other sole parents are also exempt from looking for paid work because of age, violence problems, children’s needs and disabilities or health issues - but they still lost $62 per week. Neither of these groups is expected to look for work, so why reduce their incomes?
All the sole parents affected by the current round of cuts have already been officially expected to look for paid work for at least two years, since their child turned six. Many who failed to find jobs lack suitable work experience, as well facing the difficulties of a tight job market.
Sole parents face potential bias from employers, who know they are likely to need time off to their children’s needs. Some may show disabilities, are older and/or have other visible characteristics that employers don’t like. Often therefore sole parents are only offered casual jobs (often low paid) that lack predictability, have no security or possibilities of promotion. Research shows that bad jobs damage parental confidence and skills. Well-paid jobs that fit children’s time needs are scarce.
And there are far more job seekers than available jobs. Current vacancies are around 150,000 at any one time, but as I have previously written there are around 600,000 people looking officially for jobs – plus others who want work, and those in work who want to change jobs. So there may be four people for every job, and many more for the part-time positions that fit around school hours.
By removing some 140,000 sole parents from “parenting payments” over the past six years, the government has inappropriately reduced their status to just being job seekers. This is a failure by government to recognise the main responsibility of sole parents as caring effectively for their children, including those aged over eight.
In June 2011, there were 630,000 lone parent families with dependants in the population. Nearly 60% had jobs and employment increased with the age of the youngest child. So three out of four sole parents with dependent children aged 15 to 24 years had a job, compared with 35% of parents of under five. So age does create the required changes without coercion.
Parenting Payment Single maximum rate is $663.70 per fortnight but the Newstart Allowance reduces this to $533.00 per fortnight, a loss of $130.70 plus a higher taper rate for extra earnings. The annualised Newstart Allowance is less than $14,000, plus the Family Tax Benefits A+B for one child of $7,500 makes just over $21,000. This is a very low basic income, and still below the poverty line, usually estimated as half of the median income of $50,076.
Making it worthwhile to earn extra money
The official requirement is that sole parents take on 30 paid hours per fortnight. At $17 per hour, just over the minimum wage, this would contribute $510 extra per fortnight. However, this is not the net income, as the Newstart payment reduces by 40 cents per dollar earned over $62 per fortnight. This contrasts with a parenting payment threshold of $176 plus $24 per extra child, before the 40 cent cuts in.
So now out of a fortnightly $510, a sole parent now nets only $369.80, a loss of around $114, plus the basic $130 difference in the base payments. Out of this sum come the costs of any care, the related costs of going to work and the loss of time for child related activities for little over $10 per hour.
Finding flexible employment, or employers, is therefore necessary but not easy. Sole parents explain that paid jobs that fit children’s time needs are scarce and in many areas nonexistent. Many offer voluntary work as an alternative to put something back and develop skills when suitable paid work is not there.
The Government should be pleased to offer these parents an adequate living payment because of their social, rather than just economic, contributions. They add to community well-being through their primary role as sole parent, plus some voluntary work at the local school or other local service, and maybe do some extra study. Surely this is enough?