1. Social Security: A case for reform Julia Perry

2. Current payments Pensions  Age pension  Disability Support  Carer Payment  Bereavement Allowance  Parenting (Single)  Widow B (closed)  Wife (closed)  DVA service pensions for veterans, wives, widows and carers Plus 12 Family Payments Benefits  Newstart  Sickness  Special  Parenting (Partnered)  Youth Allowance  Austudy (anomalous)  Abstudy  Partner Allowance (closed)  Widow Allowance (closed)

3. Rates

4. Income tests PensionBenefit Single Rate (% of min wage) $154.20 (69.2%) $226.65 (47.1%) Free area$69$31 Taper rate40 cents per dollar of income 50/60 cents per dollar of income

5. Principles for social security  Community Acceptability  Adequacy  Equity  Maintenance of incentives and encouragement of self provision  Administrative feasibility and financial sustainability.

6. Adequacy  Minimum living standard  Percentage of wages? Average or minimum?  Comparison with two income family?  ‘Basket of goods’ – CPI or low income index, what is in the basket of goods?

7. Equity  Redistribution of income and wealth – advantaged to disadvantaged  Rights of citizens to protection against poverty  Equal assistance to those in equal need  More assistance to those in greater need  Family dependence?

8. Incentives to work  Activity test  Rates below wages  Graduated income test withdrawal  In-work benefits  Enabling programs  Eligibility rules

9. Problems with existing system  Different payments do not form a comprehensive system of support for the needy  Inequities between pensions and benefits, benefits are inadequate  Work incentives vary unsystematically  Enormous complexity  Perverse incentives

10. Single Payment structure  One payment based on low income and wealth  Rates would vary according to household circumstances, dependents and special needs  Income tests would apply consistently  Activity test would be applied

11. Conclusion  Basic income  Guaranteed Minimum Income  Conditional Minimum income

12. New System Labour force barrier add-on Other add-ons Disability Add-on Housing add-on (private rent and home buyers) Family payment (children) Living alone and sole parent add- ons Base rate Income test Based on individual not couple Income includes imputed income from wealth Threshold $50 a week Taper rate 50% then 40% People in low paid work eligible on basis of income