Newstart Recipients On Just $17 A Day After Housing Costs, Salvation Army Says

Salvation Army warns of "devastating hardship" faced by many on welfare payments.

What you need to know
  • Newstart is just $269 a week, with some recipients left with just $17 after housing costs
  • 81 percent of respondents are paying more than half their income for housing
  • The Salvation Army is pleading for an increase to welfare payments
  • The Salvos' Red Shield appeal begins soon

Some people living on the Newstart welfare payment are surviving on just $17 a day after paying for accommodation, according to new research from the Salvation Army.

The Salvos released the annual Economic and Social Impact Survey on Wednesday, a snapshot of more than 1200 people who rely on the charity's services. The report found  81 percent of clients with a mortgage or private rental are experiencing 'extreme housing stress', which means they are paying more than half of their income simply to keep a roof over their head.

For families with children, the figure was even worse, with 90 percent in the extreme category.

Among survey respondents, the average Newstart recipient -- who gets $269.40 a week in Centrelink payments -- is left with just $17 a day after paying their housing costs.

The amount of payment available under government welfare arrangements has increasingly come under the spotlight in recent times, with calls from various charities, unions, economists, and the federal Labor and Greens parties to raise the rate. Newstart, critics say, has failed to rise with inflation for many years, meaning someone on the payment is now worse off than they would be a few years ago. The Newstart payment is also well below the federal minimum wage of $694 a week.

A housing affordability report from Anglicare, released in April, found someone surviving solely on Newstart or Youth Allowance payments has been entirely priced out of the Australian rental market, able to reasonably afford only three out of 66,000 properties for rent in March -- 0.00004 percent.

“I don’t know how much more critical it can get when you’re dealing with rates of zero,” Paul McDonald, CEO of Anglicare Victoria, told ten daily last month.

“Federal governments from both sides have been asleep at the wheel on this one for too long. [Housing affordability] is now our most critical social infrastructure crisis.”

The Salvation Army said its report showed the "devastating hardship" faced by many Australians. The charity's Major Paul Moulds called on the federal government to raise the payments for welfare recipients.

"It is simply inhumane that corporations and wealthy households are handed a tax cut, while the most disadvantaged and marginalised people in this country continue to be ignored," he said in a statement.

"It is widely acknowledged it will take a minimum increase of $75 a week just to ensure people can live on the poverty line – let alone above it."

Labor's shadow minister for housing and homelessness, Doug Cameron, called on the government to do more to address housing stress and poverty.

"The gap between those doing it tough and struggling to find adequate housing and wealthy investors using unfair and unsustainable tax breaks such as negative gearing and capital gains tax discounts continues to increase," he said.

"The Salvation Army report is deeply concerning, however the personal stories of people living off such a small amount of money are heartbreaking and can’t continue to be ignored by this government."

Elsewhere in the Salvos' report, it was revealed:

  • Over 40 percent of households with children are unable to afford either three meals a day, fresh fruit and vegetables every day, or at least one meal a day with meat, chicken or vegetables
  • A quarter of of respondents moved house in the last year due to family violence, while nearly one-fifth moved due to community safety reasons
  • More than half say their financial situation has become worse over the last year
  • 28% of job seekers say the high cost of transport and/or lack of availability is a main barrier to finding employment

Federal Greens senator Rachel Siewert said the report showed the need to raise the welfare payments.

"$17 a day after accommodation expenses is obscene. Members of our community are foregoing food and safety because the Government won’t exercise political courage to lift the appalling low payment. At the same time Government is pursuing tax cuts for the wealthy," she said.

"I urge both the old parties to support my bill that would increase the rate of Newstart by $75 a week. It is well overdue and would help jobseekers find work whilst injecting money into the economy as job seekers use the additional support on goods and services."

The Salvation Army's Red Shield appeal begins soon, and Moulds asked people who were able to donate or volunteer to help.

"With increases in the cost of living, we see people going without medication, skipping meals and adequate winter heating because they are caught in the cycle of poverty," he said.