The gap between the pension and the dole will widen by a further dollar a day.THE gap between the pension and the dole will widen by a further dollar a day later this month when government payments are adjusted.
Pensioners will receive an extra $17.10 a fortnight from September 20, while recipients of the Newstart allowance – popularly known as the dole – will get a boost of just $2.90.
The reason for the disparity is the different ways the payments are indexed. When wages grow more quickly than prices, pensions are increased to reflect growth in male average weekly earnings.
But Newstart, and other payments including Widow Allowance, Partner Allowance and Sickness Allowance are indexed to the consumer price index.
Families Minister Jenny Macklin said the size of the increase to the pension reflected higher wages growth in the six months to May.
From September 20, a single pensioner will get $772.60 a fortnight, while a single person on Newstart will get $492.60.
Amelia Christie, a policy officer from the Combined Pensioners and Superannuants Association of NSW, said the ”dire” level of the Newstart allowance was particularly hard on jobseekers who were over 50, who spent an average of 70 weeks on the payment, twice as long as their younger counterparts.
”There are over 90,000 long-term unemployed people who are over 50 years of age on Newstart with little hope of finding adequate employment and these people often struggle to pay for essentials as well as the higher costs that can come with ageing,” Ms Christie said.
” They have no financial buffer against any unforseen adverse circumstances and are forced to run down any modest savings.”
Australian Council of Social Service chief executive Cassandra Goldie said Newstart recipients were ”falling further and further behind” pensioners, and there was no justification for the payments being indexed by different methods.
”It’s got to be fixed,” she said.
Last month, The Age revealed previously unpublished government-commissioned research which showed that, even before the 2009 pension rise, pensioners were much better off than people on Newstart.
The report, by Peter Saunders and Melissa Wong from the Social Policy Research Centre at the University of NSW, showed that while 1.4 per cent of aged pensioners surveyed were unable to get medical treatment if needed, among those on Newstart the proportion was 22 per cent. Whereas only 0.7 per cent of aged pensioners were unable to get a substantial meal at least once a day, for Australians on Newstart the proportion was 10.3 per cent.
The Gillard government is under pressure from welfare groups, unions and some business leaders to lift the $35 a day Newstart allowance.
But it argues that lifting the rate of the allowance would act as a disincentive for recipients to seek work.
But in a significant shift last month, Employment Minister Bill Shorten signalled he had an open mind on the issue, declaring he wanted to hear ”all and any views” on the payment.
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