A third of single mothers in financial hardship due to welfare policies, analysis finds
Kate Hamley’s youngest child’s eighth birthday should have been a cause for celebration, but she was “dreading it”.
In March, with inflation starting to bite, Hamley, 34, was booted from the single parenting payment to the much lower jobseeker payment – all for a birthday.
Under Centrelink rules, once a youngest child turns eight, parents are automatically moved from parenting to jobseeker payments. And Centrelink rules dictating how much people can earn before their payments are cut are also harsher for people on jobseeker, with Hamley calculating a $250-a-fortnight reduction to her income.
“After my part-time work was taken into account, I’d only be receiving about $30 a fortnight [in jobseeker payments],” she said. “So I made the call that it wasn’t worth jumping through all their hoops for that much.”
The longstanding federal government policy was one of several blamed for the high poverty rates among singleparent families. Analysis prepared for Anti-Poverty Week by University of Queensland researchers, released this week, shows the risk of financial hardship for single mothers is at least double that of partnered mothers.
About 34% of single mothers live in this hardship, according to the analysis of data from the household, income and labour dynamics in Australia survey.
The “proportion of single mothers in financial hardship has not dropped below approximately 30% in the past 10 years”, said researchers Dr Alice Campbell and Prof Janeen Baxter of the University of Queensland.
The research points to several policy decisions that have led to a situation where, as an Australian Council of Social Service report found last week, one in six Australian children live in poverty.
“What we’ve seen is government actually contributing,” the executive director of Anti-Poverty Week, Toni Wren, said. “It’s government-induced poverty.
“Decisions have been taken by governments of both persuasions over the past 20 years … that eroded and erased the gains that we had seen from the Hawke/Keating governments’ commitments to reduce child poverty.”
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These decisions include the Howard government’s decision to move single parents on to lower jobseeker payments when their children turn eight. The Gillard government infamously ended grandfathering arrangements in 2012, throwing 80,000 more single parents on to the lower payment.
The value of jobseeker payments has also eroded because they are indexed differently to the age pension. The single rate of jobseeker (then Newstart) was worth 92% of the age pension in 2002, compared with about 66% today with supplementary payments included, the researchers said.
Other crucial policy decisions were the failure to invest in social housing, a reduction in spending on family tax benefit payments and a dysfunctional child support system that has led to an estimated $2bn in owed debts.
The analysis noted when the temporary coronavirus supplement was removed, the new rate of jobseeker fell to approximately 30% below the poverty line. It triggered a sharp rise in rental stress for those on Centrelink payments getting commonwealth rent assistance, from 29% in June 2020 to 63% at June 2022.
The only period in the past 10 years where the proportion of single mothers in financial hardship improved was when welfare benefits were doubled in 2020.
“We saw it happen and the world didn’t cave in,” said Terese Edwards, the chief executive of the National Council of Single Mothers and their Children.
Edwards believed it was a “false economy” to view income support purely as a cost to the budget. A better safety net wouldn’t just help keep women and children out of poverty; it would also allow them to set themselves up for the future.
“I know women who haven’t completed Tafe or Vet because they’d have to give up their paid work, or someone [in the family] has become unwell, and they can’t fulfil their [study placements],” she said.
“We put money into emergency relief services, homelessness services,” Edwards said. “Imagine if some of that money went into the hands of people who were struggling.”
Since the double whammy of the end of the Covid supplements and her parenting payment, Hamley has put off getting her car serviced, seeing the dentist and other expensive medial appointments. She is doing everything she can to shield her kids from the changes.
She has “stopped buying meat for myself; I buy it for the kids, still”, echoing the results of a Foodbank report this week finding high levels of food insecurity across Australia, including among those in work.
The Albanese government has ruled out an increase to income support payments in the October budget, pointing to the state of the country’s finances. It said it will review the rate at future budgets. Grassroots welfare groups including the Australian Unemployed Workers Union and Antipoverty Centre protested the government’s inaction on poverty in Adelaide on Tuesday.
Noting the government this week committed to end family violence in a generation, Wren hoped for similar ambition on the issue of child poverty. The Australian Council of Social Service has also said it wants the government’s new wellbeing budget to include poverty targets, as has been adopted in New Zealand.
As the only income-earner in the family, Hamley was “anxious” about the future, and of “things going wrong”.
“A lot of people have a partner to talk to at the end of the day, and to share household responsibilities with,” she said. “If you’re a single parent, it’s all on you. I don’t think people realise, it is a job. We’re working constantly and we’re exhausted.
“Our kids don’t take any less to feed and clothe and house when they turn eight. They’re eating more, they’re growing … They’re still children. Our situations haven’t changed.”