08/02/2017 11:56 AM AEDT | Updated 08/02/2017 2:51 PM AEDT

Welfare Changes Mean Less Money, Longer Waits For Young People On Centrelink After Government Crackdown

New four-week waiting period, plus young people shifted to smaller payments.

The government is cracking down on welfare for young people.
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The government is cracking down on welfare for young people.

The government announced its new families bill on Wednesday morning, trumpeting two extra weeks of paid parental leave, cheaper childcare and boosts to family tax relief.

But quietly slotted in the omnibus bill are some big changes to welfare payments which will see young people get less money than before, and have to wait four weeks before getting any government help.

Young people claiming Youth Allowance will now have to wait four weeks before getting any government payments. An entire month will pass before "job-ready" unemployed youth will be paid, and they will have to complete "pre-benefit activities" as part of a job seeker program called RapidConnect Plus.

"This measure is intended to set clear expectations that young people who are job-ready should make every effort to look for work and maximise their chances of finding work before receiving income support," social services minister Christian Porter said in introducing the bill on Wednesday morning.

Such a waiting period was previously raised in 2015, but was voted down in the Senate after outcry, with opponents claiming it would force unemployed young people to live in poverty.

The bill also means young people who eventually do qualify for and receive welfare payments will end up getting far less money than they currently do. Right now, people aged over 22 and looking for work receive the Newstart payment, at $528.70 per fortnight for a single person with no children. The government wants to put people aged 22-24 on the Youth Allowance payment instead, which pays $437.50 a fortnight for a single person with no children living away from their parents' home. That's a cut of $45 each week, almost $2400 a year, a cut of more than 17 percent.

"Future young people aged between 22 to 24 years will be able to apply for and receive
Youth Allowance (other) instead of Newstart," Porter said.

In documents released alongside the bill, the Department of Social Services claimed the current rate of Newstart payments were a disincentive for young people to find paid work, and claimed the changes would save $430 million over four years.

"Currently, Newstart Allowance is paid at a higher rate than Youth Allowance. Under the current arrangements, a 22 to 24-year-old student could be financially better off if they give up full-time study to access Newstart Allowance," the department said.

"This acts as an incentive to stay on Newstart Allowance instead of pursuing full-time study to better aid a transition into work. This change removes that incentive by placing all young people aged under 25 years on the same payment arrangements, irrespective of whether they are unemployed or studying full time."

Labor's shadow minister for social services Jenny Macklin slammed the proposals.

"The Coalition's harsh plan to make young jobseekers wait five (sic) weeks for Newstart combined with their plan to change the eligibility age for Newstart will make life harder for young Australians," she said.

"Malcolm Turnbull's doesn't have a plan to help families his only plan is to rip billions from household budgets across Australia."

Greens senator Rachel Siewert also lashed the idea.

"The Government has painted this legislation as a compromise to get the childcare package through the Senate but it is just a shopping list of the nasty social safety net measures that they have not been able to get through the senate in the past. It is an attack on families, young people and the aged," she said in a statement.

"This Omnicuts bill has four week wait to access the Newstart or youth allowance if you're a young unemployed person. The Government has been trying to keep young people off income support since Tony Abbott's appalling 2014 budget."