Harsh social security breaching laws impact on families with up to 50 percent of breached job seekers falling behind in their rent, Catholic Social Services chief Frank Quinlan has told a Senate enquiry.
Mr Quinlan was addressing the Senate Inquiry into the Social Security Legislation Amendment
(Employment Services Reform) Bill 2008 this week.
Mr Quinlan told the inquiry that in many cases job search (formal or informal) will be more effective than participating in activities such as Work for the Dole.
"As a result, tough compliance regimes have the potential to discourage rapid exit to employment if not carefully managed," he said.
"We also know that severe penalties have a very high cost?" he said citing a survey which found that over 50 percent of job seekers serving eight week penalties had failed to pay rent or board on time during the penalty period and around 15 percent of this group were evicted.
In comparison, over a similar period, around 20 percent of the general job seeker population failed to pay rent or board.
Surveys also showed that the negative impact of breaching often falls on other family members, not just the non-compliant individual themselves.
Effects may include eviction from housing, having electricity and other services cut off and losing access to credit. There may also be long term effects on families where an income earner's ability to obtain credit and access to rental accommodation is constrained.
Mr Quinlan suggested that one option would be to introduce a Conditional Cash Transfer program such as that currently being trialed in New York City (Opportunity NYC).
A Conditional Cash Transfer program would allow income support recipients to earn additional income by participating in additional activities. Such programs could also include additional payments for improvements in shared goals such as children's school attendance.
Another alternative is to "make work pay" by introducing an earned income tax credit. Under an earned income tax credit regime the incentives in to enter and remain in employment would increase. An earned income tax credit may be particularly effective for recipients whose earnings are likely to be low and who are unable to use
low paid or casual employment as a stepping stone to more attractive job opportunities.
CSSA Submission to the Senate Inquiry on Social Security (CSSA, Media Release, 18/11/08)
Catholic Social Services Australia