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" system. 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 applied. 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.