Building a strong welfare system
The Government's Budget welfare reforms are aimed at increasing everyone's ability to contribute to the economy—everyone who can contribute,should contribute.
The Government will continue to provide assistance for families, seniors, people with a disability and carers, and those most in need.
The 2014‑15 Budget includes $146 billion of welfare spending, or 35 per cent of Budget expenditure.
This includes pensions, family payments, unemployment benefits and childcare support.
Our population is ageing and government spending has grown faster than the economy since 2007‑08. This is placing greater pressure on our welfare system. Decisive action is required to ensure the welfare system is sustainable.
Changes in this Budget are part of the Government's Economic Action Strategy to build a strong prosperous economy, for a safe, secure Australia.
We want government assistance to be targeted towards supporting the most vulnerable Australians, while encouraging those who are able to work or study.
- As part of our commitment to repair the Budget, income and assets thresholds for payments will be maintained at their current levels for three years from 1 July 2014 for allowances and non-pension payments, and from 1 July 2017 for pensions. The rates of family payments will also be maintained at their current rates for two years from 1 July 2014. These temporary measures will help reduce our debt without reducing payments.
- Building on the move by the former Labor Government to increase the pension age to 67 from 1 July 2017, the Government will continue the gradual increase in the Age Pension age to 70 by 1 July 2035.
- The Government will also index pensions to inflation from September 2017. This will help ensure the Age Pension is sustainable, while pensions still keep up with the cost of living.
- The Government will not include the family home in the means test for the Age Pension.
Family payment reform
- The Government is tightening eligibility for family payments to ensure it supports those most in need of assistance. Families will continue to receive Family Tax Benefit Part B (FTB‑B) until one parent earns $100,000 per annum. Families will receive FTB‑B until their youngest child turns six. Existing recipients with children six or older will continue to receive FTB‑B for two years.
- Low income single parents will receive a new supplement of $750 per annum for each child aged between six and twelve.
Working age reform
- The Government is reinforcing the need for young Australians to either earn or learn. The changes will prevent young Australians from becoming reliant on welfare.
- Because we want new jobseekers, especially those leaving school and university, to actually look for work, income support will only be provided once a six month period of job hunting has been completed.
- This new waiting period will be reduced for those who have already been working for significant periods.
- The Government will introduce Restart which will provide a clear, long‑term incentive for employers to take on, and keep, mature age workers.
The Government will continue to consider what further structural reforms are needed to ensure the welfare system is sustainable for future generations. This will be informed by the Review of Social Welfare, Tax White Paper, Federation White Paper, Intergenerational Report and the Review of Indigenous Training and Employment.