For Ricki Spencer, the cost of living announcements in Tuesday’s federal budget were disappointing.
Spencer, 54, receives the disability support pension (DSP) and lives in a private rental property in Melbourne. She receives the maximum rate of commonwealth rent assistance (CRA) – $157.20 to help with her $700 a fortnight rent – and will benefit from the 15% increase of the cap, announced by Labor as one of the key cost-of-living relief measures for low-income earners.
For a single person with no children, that’s an extra $23.58 a fortnight.
“I’m not going to be ungrateful, it will help – that will make a difference to some of us to afford our medication for the fortnight or buy more toilet paper. But the reality is, people like myself, we’re trapped,” Spencer said.
Spencer relies on food banks, not least because her medical costs keep increasing and many services require upfront payment before any rebates are applied. She is on the public waitlist for back surgery.
Spencer said she lives in constant fear of her rent increasing again, or eviction.
“There was no commitment to say, we’re going to look at the way the rental market works or at incentives for landlords to rent to people over a certain age or on income support,” she said. “For me, this is just a Band-Aid … This might help me buy some more fresh bread, but at the end of the day I’m still paying 50-60% of my pension on rent.”
Labor’s budget confirmed a $40-a-fortnight increase to some social security payments including jobseeker, youth allowance and Austudy, while people aged 55-59 will be paid a higher rate of jobseeker previously only provided to those aged 60 and over. Those on the DSP and the age pension will not benefit from the increase.
Another change will allow people to continue receiving the single parenting payment until their youngest child turns 14. The payment is higher than jobseeker and currently expires for parents when their child turns eight.
The Australian Council of Social Service (Acoss) said the changes to parenting payment were welcome, but the $40 increase to other payments would still leave “more than one million people in poverty”. The Antipoverty Centre, which is among groups calling for an independent body to set welfare payments, said it was proof politicians could not be trusted to set welfare payments.
The government’s economic inclusion advisory committee, which offered non-binding recommendations ahead of the budget, had called for a “substantial increase” to jobseeker as a first priority.
Ben Phillips, a principal research fellow at the Australian National University, said the increases were welcome, but fell short of the committee’s recommendations.
He said the total welfare changes were worth about $2bn a year. “It sort of sounds impressive but it doesn’t really go a long way to lowering poverty in any significant or meaningful way,” Phillips said. “Not to say it’s not beneficial, but it just doesn’t really do enough.”
The government said it sought to balance the increases with the overall state of the budget and economic conditions, including high inflation.
Phillips, who is also on the advisory committee, said the welfare changes would reduce overall poverty from about 13.6% to 13.3% of the population, lifting about 80,000 people out of poverty. Most of those individuals were single parents and renters.
For jobseekers, poverty rates remained at 86%, Phillips said.
Among them is Deborah Jacobs, 66, who lives in a public housing unit in Adelaide. She has various health conditions and, after a 40-year career, has been on unemployment benefits since 2008.
Jacobs said the $40 a fortnight increase to jobseeker was “very depressing”. “But you have to look at the positive side, too, at least we got something.”
Jacobs won’t benefit from the increase to rent assistance because she lives in public housing, though she’ll get bill relief through the separate energy concessions package. Jacobs said some of the jobseeker increase would be absorbed by a rent rise: her public housing is set at 25% of her income.
“I’ve been relying on things like scrambled eggs where I can get good value for money,” she said. “[And] home-brand bread to make sandwiches. At least I’ve got something in my stomach that way.”
Amelia Cotsanis, 24, who has been receiving youth allowance since 2017, said the extra $40 a fortnight was “not very substantial”.
“I’m not necessarily jumping for joy,” Cotsanis said. “Especially with inflation and the cost-of-living crisis at the moment, it doesn’t really feel like it would make that much of a difference to my day-to-day life.”
Cotsanis, studies youth work and is currently completing an unpaid full-time placement. Like many on low incomes, living in a sharehouse, she doesn’t receive commonwealth rent assistance.
“Everyone I know that’s living out of home or in a sharehouse is having their rent increased whenever their lease is up … and a lot of students have internships that are unpaid as a requirement of studying,” Cotsanis said. “$40 a fortnight is not going to cut it.”
Prof Peter Whiteford, a social security expert and inclusion committee member, said even with the changes to jobseeker and rent assistance, Australia’s rate of unemployment benefits for some cohorts would be the second lowest in the OECD.
