Unemployment Benefits - Australia

Australia

In Australia, social security benefits, including unemployment benefits, are funded through the income tax system. There is no compulsory national unemployment insurance fund. Rather, benefits are funded in the annual Federal Budget by the National Treasury and are administrated and distributed throughout the nation by the government agency, Centrelink. Benefit rates are indexed to the Consumer Price Index and are adjusted twice a year according to inflation or deflation.

There are two types of payment available to those experiencing unemployment. The first, called Youth Allowance, is paid to young people aged 16–20 (or 15, if deemed to meet the criteria for being considered 'independent' by Centrelink). Youth Allowance is also paid to full-time students aged 16–24, and to full-time Australian Apprenticeship workers aged 16–24. People aged below 18 who have not completed their High School education, are usually required to be in full-time education, undertaking an apprenticeship or doing training to be eligible for Youth Allowance. For single people under 18 years of age living with a parent or parents the basic rate is A$91.60 per week. For over-18- to 20-year-olds living at home this increases to A$110.15 per week. For those aged 18–20 not living at home the rate is A$167.35 per week. There are special rates for those with partners and/or children.

The second kind of payment is called Newstart Allowance and is paid to unemployed people over the age of 21 and under the pension eligibility age. To receive a Newstart payment, recipients must be unemployed, be prepared to enter into an Employment Pathway Plan (previously called an Activity Agreement) by which they agree to undertake certain activities to increase their opportunities for employment, be Australian Residents and satisfy the income test (which limits weekly income to A$32 per week before benefits begin to reduce, until one's income reaches A$397.42 per week at which point no unemployment benefits are paid) and the assets test (an eligible recipient can have assets of up to A$161,500 if he or she owns a home before the allowance begins to reduce and $278,500 if he or she does do not own a home). The rate of Newstart allowance as at the 12th January 2010 for single people without children is A$228 per week, paid fortnightly. (This does not include supplemental payments such as Rent Assistance.) Different rates apply to people with partners and/or children.

The system in Australia is designed to support citizens no matter how long they have been unemployed. In recent years the former Coalition government under John Howard has increased the requirements of the Activity Agreement, providing for controversial schemes such as Work for the Dole, which requires that people on benefits for 6 months or longer work voluntarily for a community organisation regardless of whether such work increases their skills or job prospects. Since the Labor government under Kevin Rudd was elected in 2008, the length of unemployment before one is required to fulfill the requirements of the Activity Agreement (which has been renamed the Employment Pathway Plan) has increased from six to twelve months. There are other options available as alternatives to the Work for the Dole scheme, such as undertaking part-time work or study and training, the basic premise of the Employment Pathway Plan being to keep the welfare recipient active and involved in seeking full-time work.

For people renting their accommodation, unemployment benefits are supplemented by Rent Assistance, which, for single people as at 29 June 2012, begins to be paid when weekly rent is more than A$53.40. Rent Assistance is paid as a proportion of total rent paid (75 cents per dollar paid over $53.40 up to the maximum). The maximum amount of rent assistance payable is A$60.10 per week, and is paid when the total weekly rent exceeds A$133.54 per week. Different rates apply to people with partners and/or children, or who are sharing accommodation.

In Australia, as in the United Kingdom, unemployment benefits are commonly referred to as "the dole"; to receive the benefit is to "be on the dole". "Dole" here is an archaic expression meaning "one's allotted portion", from the synonymous Old English word dāl.

External links

• Centrelink web-site
• Department of Human Services web-site