Introduction
I was inspired to write a post about the economic realities of existing on Centrelink payments after feeling frustrated with medical professionals telling me their gap fees after the Medicare rebate for their services (note, I was told that I would have to pay the full fee up front and then organise the rebate myself). This information was after I had mentioned that I have a Pension Card. In this instance, the gap fee totalled $240 ($40 for initial consultation and $200 for the gastroscopy). I also have been asked if I have private health insurance, which in my current financial circumstances, I could not hope to afford. I know that I am not the only person who receives Centrelink payments who finds themselves in similar circumstances, so I hope that sharing some quick statistics on the current rates of payment along with the costs of existence, will provide some better understanding to those who are fortunate enough to not have to know this reality. In doing so, I further hope that people do not have to experience the sense of humiliation, frustration or indignation in response to professionals offering services that the patient or client cannot hope to afford.Centrelink payment types and rates of payment
Per fortnight
Age Pension $712.00Carer Payment $712.00
Disability Support Pension $712.00
Newstart $492.60
Abstudy 407.50, if aged 16-21; $492.60 aged 22 or older
Austudy $407.50
Youth Allowance $402.70
Notes: all payment rates quoted above were current at time of publishing, and are based on the single with no children rate. The Youth Allowance rate cited is that of someone who is over 18 and has to live away from home. Newstart payments are given to people who are either unemployed or deemed unfit for work but deemed to not meet the criteria for the Disability Support Pension (DSP). One of the criteria is that the condition is being treated but is not expected to improve further over the next two years. This prediction is particularly difficult with regards to mental/psychiatric illness. More information on eligibility for the DSP can be found here. A Carer Payment is given where caring duties involve ongoing daily care and stops the carer from being able to maintain employment.
If the recipient happens to be living in private rented accommodation, they may be eligible for Rent Assistance from Centrelink too. Again the single with no children is quoted.
Single occupancy $121.00, or
Per person in shared household $80.67
This maxium amount of Rent Assistance is paid if the recipient is paying more than $268.73 in rent per fortnight. With the average prices of private rental properties in the capital cities of Australia currently greater than this amount, I would imagine that there are very few Centrelink payment recipients being paid less than the maximum amount of Rent Assistance.
Thus, if a person is renting and receiving any of the above Centrelink payments, their total income will be as follows (lowest to highest, using the share Rent Assistance rate*):
Per week $241.69 - $396.34
Per fortnight $483.37 - $792.67
Per calendar month $1,047.30 - $1,717.45
Per annum $12,567.62 - $20,609.42
*The shared rate of Rent Assistance was chosen, as most people receiving Centrelink payments for any period of time beyond their savings cannot afford to keep paying rent in a single occupancy, as will be demonstrated next.
Basic costs of existing
As the concept of the 'poverty line' is sometimes viewed as contentious, I thought I would simply report the basic costs of rent, food and bills. I have done my best to find the most recent and representative data that is readily publicly available, which happens to be a crowd source International database called 'Numbeo'. In preparing this section I searched for other possible sources, such as the Australian Bureau of Statistics or research bodies like the Melbourne Institute, however, I could not locate the basic data that I wanted to present in this paper.As I am based in Melbourne, I will present data for this city, as well as the National average. For the sake of simplicity, I will present only one time period, which is the per calendar month (PCM) cost for each of the basic costs per person.
Private housing rental
The price listed here is that of a three bedroom apartment in the suburbs outside of the city centre. Unfortunately, I have not been able to find the price of houses, however I would argue that these would be more expensive than an apartment.Melbourne $666.66
National average $1,000.00
Food
The balanced diet estimate only covers the basics and does not include other household items, such as toiletries and cleaning products. The costs listed here are per person.Melbourne $379.48
National average $357.82
Utilities
The prices below only include the cost of gas, water and electricity.Melbourne $191.09
National average $200.00
Summing it up
The total cost of paying for the basics per calendar month are $1,237.23 and $1,557.82, for Melbourne and the National average respectively.The total amount of income received from Centrelink payments per month range from $1,047.30 to $1,717.45.
In Melbourne, the lowest rate of payment results in a $189.93 shortfall and the highest rate leaves $480.22 in 'savings'. The National average figures are worse, with the lowest income resulting in a $510.52 shortfall and the highest income leaving $159.63 in 'savings'.
Bear in mind, these costs do not include many other items which we in Australia have come to see as 'essential'; such as cleaning products, toiletries, transport (private or public), telephone (landline or mobile), and medical expenses (including medications). Any so-called savings that the upper end of Centrelink payments would be used to pay for these 'essentials'.
Those on the lowest payment (Youth Allowance, students) are able to earn up to $405 per fortnight through employment before the rate of payment is affected. Anyone who has undertaken full time study however, will appreciate how difficult it can be to maintain employment while also trying to undertake full time studies and do well.
Those receiving Newstart can earn up to $65 per fortnight before payments are affected.
I would point out however, that this December there were 61,483 recipients of Newstart, and 4,642 Youth Allowance recipients who were deemed incapacitated and thus not required to undertake job search activities. This means that a person is deemed unfit for any employment, which means that they could not undertake gainful employment and thus unable supplement their payments. Over half of these recipients of both payments have been receiving them for more than 12 months. Whilst it is not apparent how many of these people receiving short or long term Newstart or Youth Allowance payments have been deemed incapacitated temporarily or long term, there is an argument that a high proportion of those on long term support and incapacitated should be receiving Disability Support Payments.
Likewise, those in receipt of Disability and Age Pensions are unlikely to be able to supplement their payments for health or other personal reasons. In addition, as pointed out by a friend when preparing this blog, the cost of medications required to maintain health can be very high, particularly if the medication is not PBS funded.
Finally, as one of the eligibility criteria for the Carer Payment is that the person being cared for requires at least 20 hours of care, Carers are also unlikely to have the capacity to supplement their payment.
Notes
All figures quoted were accurate at the time of publishing, 29 December 2012.I welcome any input or feedback, especially suggestions for data that is sourced from more reliable sources. For those interested, the Australian Council of Social Services (ACOSS) published a report on poverty in Australia, which includes an analysis of those receiving Centrelink payments. The latest report section can be accessed here. ACOSS have also published a factsheet about Newstart payments which includes their own analysis of living costs for someone living in Brisbane.
I have used the word 'existing' in this article, because words such as 'living' imply that more than making sure that there is a roof over one's head and food in one's belly is possible.
