Australians on income support are “structurally unable to afford the basics of life” and are unable to absorb any more cost of living increases, according to a new report.
The average jobseeker recipient has a shortfall of $135 a week on just the basic weekly cost of food, housing and transport, and no ability to budget for lump-sum payments such as utilities, household goods or emergency expenses, Anglicare’s most recent cost-of-living index has found.
The report, released on Thursday, drew on household survey data from the Australian Bureau of Statistics to determine the weekly average cost of rent, transport and food, before comparing those to income support payments, including commonwealth rent assistance.
Whatever remained would need to cover utilities, telecommunications, insurance and household goods – costs which may come monthly or quarterly – and any emergency expenses.
But, in many scenarios, there was nothing left over for those utilities and other necessities, and in some scenarios even weekly costs could not be met.
A single parent who was receiving the parenting payment would have just $24 remaining a week after covering weekly costs, the report found.
A household with two jobseeker recipients and two children would be down $17 a week on basic costs, making it likely they would be living in unsuitable accommodation or cutting back on necessities such as food.
It is impossible to live alone on the jobseeker payment, the report found, with basic weekly costs exceeding income by $135 a week.
“This is important to note as the largest cohort of people on the jobseeker payment are over the age of 45, and may find it difficult to access and live in shared accommodation,” the report said.
The biggest cost for all modelled scenarios was rent, with average rents going from $410 per week in January 2020 to $624 at the time of writing the report.
Because jobseeker and other working-age welfare payments are benchmarked against the consumer price index, rather than the poverty line or another measure that captures living standards, the one-off increases in 2021 and 2023 have not given welfare recipients a reprieve, the report argued.
“In periods when essential costs rise faster than other prices, payments indexed against the CPI alone will fall even further behind poverty measures and incomes in the broader community,” the report said.
The now-annual index, which the social advocacy organisation first published in 2022, examines the financial situation of minimum wage workers and welfare recipients in alternate years.
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Last year, the index found that a minimum-wage worker in a single household would have $57 of income left each week after basic living expenses had been met, and that it would be impossible for a single-parent household to cover the basics without working additional or unsociable hours, and relying on additional government benefits – and even then they would fall behind.
Anglicare has reiterated its call for the federal government to raise jobseeker payment rates – currently $381.35 per week for a single person or $698.30 for a couple without children – to the Henderson poverty line, which was $612.47 and $819.31 respectively at March this year.
The organisation also recommended establishing an independent income support payment commission to set and maintain payment rates into the future.
“These payments have been too low for too long, trapping people in poverty instead of helping them escape it,” said Anglicare Australia’s executive director, Kasy Chambers.
“Centrelink payments simply do not cover the costs of essentials, like food and rent. That means people are being forced to skip meals, avoid medical care and cram their families into overcrowded homes. Some are being pushed into debt spirals just to keep up with everyday costs.”
Chambers said low-income Australians needed “real action and real leadership”.
“We must raise the rate of these payments. Without action, people will be pushed even deeper into hardship, poverty and homelessness.”