Speech to Parliament - Income Support Bonus

06 February 2013

This bill will give effect to this government's 2012-13 budget commitment to introduce a new supplementary allowance for eligible income support recipients. In practical terms, this measure will help around 1.4 million Australians to manage unanticipated expenses by providing an additional $210 a year to single recipients and $350 a year to most couples where both partners are eligible. These payments are being made because we know that households reliant on income support benefits as their main source of income can find it hard to manage unexpected costs, such as urgent repairs on the family car or appliances, bills that are higher than expected or unforeseeable medical or dental costs.

These payments underline the government's $1.1 billion commitment over the next four years to support eligible welfare recipients. This includes Newstart allowance, youth allowance, parenting payment, Austudy, ABSTUDY, living away from home allowance, sickness allowance, exceptional circumstances relief payment, transitional farm family payment and special benefit. The income support bonus will also be tax free and indexed twice yearly in line with the consumer price index, making sure the payment keeps pace with the real costs recipients face. We understand that it is very tough to live on unemployment benefits, including but not only the Newstart allowance.

Eligible Australians, defined as those receiving a qualifying income support payment on 20 March 2013, can look forward to receiving their initial payment as part of their first income support payment after this date. They will not have to apply to receive the income support bonus; the payment will be automatically made to those eligible people. Income support bonus payments will then be made in March and September every year, provided the recipient is on a qualifying income support payment on 20 March or 20 September for the respective payment.

For single recipients, the payment will be $105 for the initial payment or $210 a year. The payment to most persons who are a member of a couple will be $87.50 in the first payment or $175 a year. As is the case with other supplements, each entitled member of a couple separated by illness, with a partner in respite care or with a partner in jail will be paid at the single rate of $105. The bonus is not separately means tested, because income and assets tests already apply to the person's qualifying income support payment, but will be subject to the existing income management provisions.

The government also welcomes today the report of the Senate Education, Employment and Workplace Relations References Committee on the adequacy of the allowance payment system. We will be carefully and seriously considering the report recommendations. I am indebted to the work of the senators and also those who have made contributions to this report. The Gillard government has acknowledged on a number of occasions that it is not easy for a person to live on the current rate of the Newstart allowance and that many in our community are doing it tough. Combined with related measures, such as the doubling of the liquid assets waiting period thresholds, the income support bonus will assist vulnerable members of our society, including those on the Newstart allowance, to manage unforeseen expenses and increasing costs.

The income support bonus offers assistance to disadvantaged Australians whilst being framed against a background of fiscal prudence, given the tough budgetary considerations of the government and our ongoing priority on jobs. Indeed, the income support bonus is fully accounted for in MYEFO as part of the budget process. It will again be accounted for in the budget bottom line. Today, the real story which gets overlooked by those opposite is that it was the unholy coalition of the conservatives and the Greens opposing a reduction in the corporate tax rate that in fact allowed us to spend some of that money on the income support bonus. We believe fundamentally in spreading the benefits of the boom.

The consequence, if this bill is successfully passed tonight, is that over one million Australians are set to benefit from $1.1 billion in extra income support to cope with cost-of-living pressures. We hope to pass this bill tonight despite the opposition's constant negativity. We are disappointed that they will vote against this modest extra support. I would again beseech the opposition: this battlers' bonus will deliver more than $1.1 billion in extra payments over the next four years to help people receiving income support cope with those unexpected cost-of-living expenses. The Gillard government recognises that people who rely on income support benefits as their main source of income can find it very tough to manage those unexpected costs. As I said earlier, there are always things which are difficult to plan for—such is life—such as: urgent repairs on the family car or essential appliances; those unexpected, but necessary, medical expenses; or indeed the bills which come in. I am disappointed that the opposition will not support these one million low-paid Australians, who are worthy of additional support.

As I have said, those eligible will not have to apply to receive the income support bonus, as the payment will be made automatically by the Department of Human Services. In conclusion, our first priority is to help create and maintain fair jobs for all Australians who are willing to work, but this income support bonus will help us get the balance right. We believe fundamentally in helping disadvantaged Australians while doing everything that we can to move people back into paid work. That is why we are putting significant resources into vocational training to assist people, into job agencies to help place people in work, into helping Indigenous Australians in remote communities find work and be work ready and into helping people with disabilities, who are a group that have been neglected in the labour market for a very long time.

This income support bonus is a further effort to strengthen our safety net to maintain this country's position as the most just society on earth. The coalition's decision to vote against this important legislation, if that is what they do, unfortunately comes on the back of the Leader of the Opposition telling the National Press Club last week that he plans to increase superannuation taxes by up to $500 on 3.6 million low-paid Australians who earn less than $37,000 a year and who include 2.1 million working women.