Family Matters No. 28 - April 1991

Employment and income security support

Helen Brownlee

Abstract

The government's response to families whose members are not employed is discussed. JET and NEWSTART programs are described, followed by an outline of the structural changes which are to be made during 1991 to the systems of support for unemployed, disabled and sick people. Issues are identified which need to be addressed if the government's active labour market policies are to be effective.

Helen Brownlee, AIFS Fellow, outlines government policies to improve employment prospects of disadvantaged families, and raises a number of issues which need to be addressed if the policies are to be effective

At a time when employers' responses to workers with family responsibilities are being examined, it is crucial to look also at the government's response to families whose members are not employed.

During the second half of the 1980s, income support and labour market programs were increasingly seen as dual strategies to alleviate poverty, particularly among families with children. The Social Security Review, under the direction of Bettina Cass, recommended not only that the adequacy of social security payments be improved, but also that active labour market policies be introduced to improve the access of particularly disadvantaged groups of pensioners and beneficiaries to employment, education or training opportunities (Raymond 1987; Cass 1988; Cass, Gibson and Tito 1988).

Active Labour Market Policies

As a consequence of the Social Security Review, two programs (JET and NEWSTART) were introduced in the 1988-89 Budget to assist members of some of the most disadvantaged groups in the community to enter, or re-enter, the workforce: long-term unemployed people, around a fifth of whom at that date were men in married couple families with children, and sole-parent pensioners, mainly women (Australia 1990b).

NEWSTART

This program, which began in February 1989, was originally established to assist unemployed people between the ages of 21 and 54 years who had been on unemployment benefit for over 12 months. From January 1990, this group of long-term unemployed people was expanded to include 18-20 year-olds.

Conducted by the Department of Social Security in conjunction with the Department of Employment, Education and Training, the program involves: new counselling and information procedures; a doubling of places for the NEWSTART group in existing government labour market training programs; plans to improve job placement and community awareness; and transition to work incentives, such as an Employment Entry payment of $100 on starting work and provisions to allow unemployed people to retain benefits while undertaking short training courses.

JET

This program (Jobs, Education and Training Scheme) to assist sole-parent pensioners, which began in March 1989, is run by the Department of Social Security in conjunction with the Department of Employment, Education and Training and the Department of Community Services and Health. Participation in this program is voluntary.

Advisers located in particular Department of Social Security regional offices provide needs assessments, counselling and advice and refer sole-parent pensioners to services provided by other agencies, such as the Commonwealth Employment Service, for places in government labour market training programs and job market assistance and the Department of Community Services and Health for help with access to child care. A major part of the expenditure on JET was used to fund additional places for sole parents in existing labour market programs; part of the expenditure was also used to fund additional child care places. By March 1991 there were 80 JET advisers located in the Department of Social Security regional offices around Australia, in major rural centres as well as in metropolitan areas.

Priority is given to offering assistance to particular groups of pensioners: teenage sole parents; sole parents who have been on sole-parent pension for at least one year and who have children over the age of six; and pensioners who will lose their pension within two years due to their youngest child reaching the age of 16 years.

Evaluation of the programs

As a result of an interim evaluation of the program, several JET initiatives were introduced in the 1990-91 budget, including the extension of the $100 employment entry payment (previously available only to long-term unemployed people) to sole-parent pensioners returning to work, and the extension of the Formal Training Allowance training component of $30 a week to sole-parent pensioners under 21 years of age.

As part of the evaluation of NEWSTART, a large survey of NEWSTART participants and other long-term unemployment beneficiaries was undertaken. At the time of writing, the results of this survey have not been published.

Major comprehensive evaluations of both the NEWSTART and JET programs are being undertaken in 1990-91.

Changes to income support

More recently, as part of the active employment strategy, radical changes to government income support programs were announced in the 1990-91 Budget (Australia 1990a). These consist of structural changes to the systems of support for unemployed, disabled and sick people.

The current system of unemployment benefit will run until July 1991, when it will be replaced by a two-tier system of benefit - the Job Search Allowance for people who have been unemployed for less than 12 months and the NEWSTART Allowance for people unemployed for 12 months or more. During the first 12 months of unemployment, recipients of Job Search Allowance will be given increased assistance to help them find work. After 12 months, however, unemployed people cannot automatically transfer from Job Search Allowance to the NEWSTART Allowance. In order to obtain and keep the NEWSTART allowance, long-term unemployed people have to agree to work towards improving their employment prospects. This approach involves the NEWSTART Allowance recipient undergoing an intensive interview with the Department of Social Security and Commonwealth Employment Service officers and gives him/her access to a broad range of labour market and other related assistance and to other measures, such as assistance with transport and commuting costs. Expenditure on existing labour market employment and training programs will increase substantially to deal with these changes.

The aim of changes to the system of support for people with disabilities is to encourage disabled people to enter the workforce and thus reduce their dependency on long-term income support. These policies arose out of concerns about the increasing numbers of people dependent on Invalid Pensions and Sickness Benefits, with, for example, the number of Invalid Pensioners (including dependent partners) having increased from 289,000 to 413,000 between June 1980 and June 1990.

From October 1991, the Invalid Pension will be replaced by the Disability Support Pension. The eligibility criteria of '85 per cent permanently incapacitated for work' will be replaced by criteria of a 'minimum impairment threshold of 20 per cent' and the 'inability to work full-time at full-award wages in the foreseeable future, due wholly or substantially to a physical, intellectual or psychiatric impairment' (DSS 1990).

Changes to the eligibility criteria plus increases to the 'earnings trigger' for medical review from $50 a week to $250 a week will enable some disabled people to work part-time yet still receive a part-pension. Disabled people who are assessed as having some employment potential have to undertake suitable rehabilitation, training or job search. In order to assist disabled people to obtain employment, education, labour market and rehabilitation programs will be expanded. There will also be increased benefits to disabled people entering employment through the introduction of a $200 payment for people starting work, an increase in the mobility allowance from $11 to $20 a week and the continuation of a disabled person's eligibility for the pensioner health card and its associated fringe benefits for 12 months after starting work.

Also from October 1991, a Sickness Allowance payment will replace the Sickness Benefit and the payment limited to 12 months. People with a 'significant medical condition that can be alleviated by short-term intervention' will become eligible for this allowance (DSS 1990). Measures will also be implemented to increase the number of Sickness Allowance recipients participating in rehabilitation programs. After 12 months, Sickness Allowance recipients are expected to move to the Disability Support Pension or the Job Search/NEWSTART Allowance.

Impact of Programs

This Institute has always viewed employment as crucial to family economic wellbeing and has strongly supported the Social Security Review's recommendations regarding an active employment strategy (AIFS 1985; Brownlee 1988). However, there are several important issues which need to be addressed if such a strategy is to be successful.

  • How effectively can an active employment strategy operate in the present economic climate? NEWSTART and JET were introduced during a period of increasing employment and declining unemployment. However during 1990, as a consequence of the government's economic policies, while the total number of people in employment remained virtually the same, the total number of unemployed people increased substantially. Between November 1989 and November 1990, the number of employed people fell by 0.3 per cent from a total of 7,870,700 to 7,849,900; the number of those employed full- time falling by 1 per cent, the number of those employed part-time increasing by 3 per cent. Over the same period, however, the number of unemployed people increased by 41 per cent from a total of 446,700 to 629,500 people (ABS 1989, 1990).
  • Are training programs meeting the real needs of specific groups of disadvantaged people? Are sole parents, for instance, undertaking training leading to 'traditionally female' jobs, many of which are low paid, require low skills and offer insecure or casual employment? If this is the case, sole parents may not find it worth their while financially to increase their workforce participation thereby reducing their dependence on government income support. 
  • What is being done to change the employment context for disadvantaged people? Improvements in the workplace, in work practices and in employer attitudes need to take place if an active employment strategy is to be effective (Raper 1990). Concerns about workers with family responsibilities are particularly compelling for sole parents who do not have partners with whom to share day-to-day parenting responsibilities.

There are no easy answers to these questions. However, the Institute believes the issues must be addressed if the employment prospects of disadvantaged people are to be improved. Good evaluative research is needed to test the efficacy of programs such as JET and NEWSTART.

References

  • Australia (1990a), Budget Statements 1990-91, Budget Paper No.1, AGPS, Canberra.
  • Australia (1990b), Explanatory Notes, 1990-91: Social Security Portfolio, Budget Related Paper No.6.14, AGPS, Canberra.
  • ABS (1989-1990), Australian Bureau of Statistics, The Labour Force, November 1989, 1990, Catalogue No.6203.0.
  • AIFS (1985), Families and Australia's Future, Submission to the Economic Planning Advisory Council, Australian Institute of Family Studies, Melbourne, March.
  • Brownlee, H. (1988), 'Proposals for new unemployment benefits', Family Matters, No.21, August, Australian Institute of Family Studies, Melbourne.
  • Cass, B. (1988), Income Support for the Unemployed in Australia: Towards a More Active System, Issues Paper No.4, Social Security Review, Department of Social Security, Canberra.
  • Cass, B., Gibson, F., and Tito, F. (1988), Towards Enabling Policies: Income Support for People with Disabilities, Issues Paper No.5, Social Security Review, Department of Social Security, Canberra.
  • DSS (1990), 1990-91 Budget Information, Department of Social Security, Canberra.
  • Raper, M. (1990) 'New scheme to encourage disabled back into workforce, Australian Social Welfare Impact, September.
  • Raymond, J. (1987), Bringing Up Children Alone: Policies for Sole Parents, Issues Paper No.3, Social Security Review, Department of Social Security, Canberra.