(Transcript from World News Australia)
The federal government is considering a major overhaul of the nation's $150-billion-a-year welfare system in a bid to simplify the system and help the budget work out.
Mission Australia head Patrick McClure has released his review, commissioned by the Abbott Government, into how best to reform the way welfare benefits are paid.
As Amanda Cavill reports, the review recommends reducing a very complex set of payments to just five primary options.
Patrick McClure's report suggests simplifying the current 22 payments and 55 supplements to five options.
It would deliver a tiered working-age payment, supported-living pension, child-and-youth payment, carer payment and the age pension.
Young people would not qualify for welfare payments until they turned 22 years old.
The report says people receiving welfare payments should not be left worse off under the new system.
Patrick McClure has told the ABC the social-support system needs major reform.
"Well, the current system is complex and inefficient. It's very difficult to understand and navigate for people on income support. And in addition, there are a lot of disincentives to work, and it doesn't really meet the needs of a changing labour market."
Social Services Minister Scott Morrison says the report addresses expensive, confusing and inequitable elements within the Commonwealth welfare system.
He says it has estimated about eight million -- or eight out of 10 -- taxpayers are funding an annual $150-billion welfare bill.
"And before long, that could be 10 out of 10. And when it comes to welfare, that's not a perfect score. And it's very important that we understand that every single benefit paid is paid for by a taxpayer. And there are two partners in that process, the people we're trying to help and the people who have to pay for it. Australia has historically kept the cost of its welfare system below the costs of some overseas models through its flat-rate structure and its means-testing and its need-based approach. "
Mr Morrison says a key part of welfare reform is encouraging people back into the workforce.
He says young people in particular need to be earning or learning.
Under the reforms, unemployment benefits would be changed into a three-level working-age payment based on the recipient's capacity to work.
A passport-to-work system would be introduced, showing people how much extra they could earn by working.
It would allow them to return to their previous income-support payments if the job ended or their hours were wound back.
Greens Deputy Leader Adam Bandt says that is all very well but the number of available jobs in Australia is falling and the new system will disadvantage the most vulnerable.
"People will then also stand to get less money when the jobs just aren't there. Under these reform proposals, a person will be penalised because they didn't find a job that doesn't exist. We'll have a closer look at the details."
The review recommends the supported-living pension would be available for people with a disability and an assessed work capacity of fewer than eight hours a week.
But they would qualify only if the incapacity was expected to last for at least five years, instead of two years under the current Disability Support Pension rules.
Liberal Democrat senator David Leyonhelm says he thinks the report is a step in the right direction.
"What I do know is the current system is unsustainable. There are an awful lot of people receiving welfare who have a reason not to work because of the way the incentive scheme is structured. Disability-support (DSP) recipients are an example that I know about. Probably two-thirds of DSP recipients could and should be working, but they have an incentive not to. If these changes, these recommendations, are implemented and change that, then it can only be good."
Mr McClure has also suggested the child-and-youth payment be means-tested to parents of dependent children under 22.
It would rise as the child gets older and be conditional on the child being immunised.
The review says the carer payment should remain unchanged, and it did not assess the aged pension.
Labor has indicated it will support what it calls fair changes to the way welfare is delivered.
Opposition Leader Bill Shorten wants Mr Morrison to guarantee no-one will be worse off as a result of the review's recommendations.
"That doesn't mean changes shouldn't be made. That doesn't mean improvements can't be made. Of course. We always need to be making sure it's sustainable. But having a good safety net in this country is one of the reasons why we don't necessarily have some of the vast disparities between rich and poor. There are a lot of working Australians who are uncomfortable with the images of beggars, of people who've got no income, and are concerned to make sure we have an okay safety net. We'll work on welfare reform with the Government if that's what they want to do, but Labor will never sign up to harshly kicking people when they're already down."
Mr Morrison may have difficulty gaining that support because he is refusing to rule out making people under age 30 wait six months before receiving the dole.
That recommendation, which as been part of the Government plan, is NOT contained in the McClure report.
The Government is now considering the recommendations, and any changes will be included in the upcoming May budget.
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