Why does this matter?

Everyone should be treated with dignity and respect, but the Government is imposing new restrictions, sanctions, and cuts on the welfare system.

The Government has introduced legislation inflicting new punitive sanctions on people who receive a benefit and making them re-apply twice as often to keep the payments that they need.

The new sanctions include ‘money management’, where 50% of someone’s income is put on a payment card that can only be used at selected stores that they have no say in. This makes it harder to pay the rent, power bills, and buy school uniforms or shoes. The other new sanction is ‘community work experience’, forcing people to do unpaid ’volunteer’ work for community organisations to keep their benefit.

The evidence overwhelmingly shows that sanctions, especially money management and mandatory work experience, do more harm than good.  It can even make it harder for people to transition into decent work or education.

These changes will lock more people in poverty and make it even harder and more stressful for people receiving benefits to get by.

Poverty is a political choice, and the Government is choosing to blame people on benefits rather than take ownership for their rigged economy, their underfunding of the healthcare system, and their tax breaks for big landlords.

What could my submission say?

Tell the Select Committee why you OPPOSE the Social Security Amendment Bill by 10 January 2025. You could say, for example:

• Sanctions will only push more people deeper into poverty.
• Sanctions don’t work and leave people no closer to finding meaningful work or education.
• Forcing people to use money management systems and limiting their choices can feel shameful or embarrassing. It will make it more difficult for people to pay their rent or their bills on time and erodes people’s financial skills.
• Mandatory work experience is unfair and burns people out, while doing nothing to help people into work or training.
• These new sanctions are solely about punishing people on benefits and do nothing to help them out of poverty.
• I oppose putting people through the unnecessary difficulty of re-applying twice as often.

What else could my submission say?

Sanctions hurt people

• Sanctions do nothing to support people out of poverty or into work or education. Punishing people on benefits by cutting their income, restricting their income, or forcing them to do unpaid work makes it even harder for people to look after their wellbeing and their family’s wellbeing.
• The evidence shows that these restrictions make poverty worse.
  • MSD officials say that money management can be “stigmatising, open to exploitation, and create logistical difficulties”, and that the payment cards can leave people unable to pay their rent.
  • MSD officials also told the Minister that work experience sanctions do not increase the probability of people moving into work, and instead result in people receiving income support for longer than they otherwise would.
• When New Zealand tried mandatory work experience schemes in the 1990s, the Government found that the scheme had zero positive impacts on training and employment outcomes.

These sanctions are financially punishing

• These are financial sanctions, despite what the Government says.
• People will not be able to receive hardship payments while being punished with money management or mandatory work experience. That means that people and their families could be plunged into poverty when they are refused food grants or other hardship support that they urgently need.
• When people are unable to pay their rent, their loans, or their other bills because too much of their income is locked up on a payment card, it causes significant financial hardship.
• Limitations on how people can use their income, or how their partner uses their income, means people stay in violent relationships and risk greater abuse.
• Compulsory work experience also fails to recognise the costs associated with working, even for a temporary period, such as clothing, transport, and the prohibitive costs of childcare. Nobody should be made to work without pay.

The experience in Australia should have been a warning

• Both money management and mandatory work experience have been tried in Australia, and both have failed.
• Australia’s introduction of compulsory money management created a lot of shame and stigma for people on benefits. In some cases, the desperate situations led people to steal to meet their needs. People subjected to compulsory money management came out the other side with poorer financial capability, and greater dependency on the income support system.
• A review by the Australian Government concluded that mandatory work experience was the least effective way to help people find jobs, and participants said that the experience left them burnt out and unsupported.

What should we do instead?

• We can end poverty by treating people with dignity and respect, guaranteeing liveable incomes, ending benefit sanctions, and providing tailored support to connect people with meaningful jobs that match their skills and aspirations.