The Guardian April 30, 2003

Government softens edges of "breach" system

by Andrew Jackson

Two major wins and one kick in the teeth will result from the passing of 
the Australians Working Together Bill in the Senate. One of the wins will 
bring enormous relief to unemployed people.

After years of pressure by welfare advocate groups, charities and the 
public the Federal Government finally caved in and moved to reduce some of 
the severe financial penalties imposed on the unemployed under the "breach" 

Penalties of $890 could be reduced to $275 for some unemployed people on 
Newstart Allowance.

The National Welfare Rights Network (NWRN) estimated that two out of every 
three people breached over the next year, or up to 100,000 unemployed 
people, could see their penalties reduced as a result of the changes.

Unfortunately the Government has failed to take steps to reduce the harsh 
penalties facing people who are breached a second or third time, where they 
can lose up to all of their payment for eight weeks, or a quarter of their 
payment for six months.

The Democrats used their balance of power in the Senate to force the change 
in the breach system in return for passing other aspects of the Bill.

The one major step backward of the Bill was the extension of the "Activity 
Test" obligation to the older unemployed and single parents.

A Breaches Task Force has been established to monitor the extension of the 
penalty system and address the outstanding concerns of welfare groups that 
were not addressed in this legislation.

Surprisingly, some other aspects of the Bill were positive.

These include: $433 million for Working Credits*; $20 million in language, 
literacy and numeracy allowances; $62 million for the Personal Support 
Program to assist vulnerable job seekers and $251 million to assist sole 
parents into employment.

Unemployed people have been fined a staggering $1 billion worth of Social 
Security payments between 1996-2002. This amounts to an average penalty of 
$700 for every unemployed person.

Almost one million activity test breaches and 500,000 administrative 
breaches have been applied during that time.

Report after report  from the Commonwealth Ombudsman to the Independent 
Review into Social Security penalties and breaches (the Pearce Report)  
found that breaches are counterproductive and are unfairly and arbitrarily 

It was also found that Centrelink often fails to contact a person prior to 
imposing a penalty  as they are required to do under the Legislation.

* When long-term unemployed resume work, they are entitled to receive an 
additional bonus from the government after they start work and unemployment 
benefits cut out.

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