‘Basics’ are the new luxury

austhouseofrepsExcerpt from the National Council of Single Mother’s Submission to The Social Services Legislation Amendment (Budget Repair) Bill September 2016

Successive Governments have made decisions that have resulted in reducing the main income of sole parent families – the same families who are in the most need and would have an immediate benefit with a hand up rather than increased harm.

Irrespective of which ‘lens’ is applied to measure hardship such as the ACOSS Poverty Report or The Household, Income and Labour Dynamics in Australia Survey (Hilda) it is sole parent families, 88% are headed up by a mother, who are the struggling just to survive.

New research from Good Shepherd Microfinance found that single mothers are over-represented among ‘payday lending’ borrowers. The research found that while 15% of women are single mothers, they now represent 47% of women using payday loans and the use of payday loans was to provide the basics.

“Single mums, whose carer duties often limit their earning potential, are also over represented in repeat borrowers and those with concurrent loans, and are far more likely to borrow for essential items like food, children’s needs and school trips. These women are having to borrow at huge interest just to provide for their children – and they’re being charged a premium for it”.[i]

The current environment requires a sole parent to compete with job seekers and new data by the ABS stated that there were 345,000 people registered with Centrelink. This does not include underemployment and the under-employed person indicated that they are seeking an extra 15 hours per week.[ii]

These numbers are imposing enough but are magnified as single mothers do not start from an equal footing. It is more likely than not that these job seekers will be living in housing stress and only one small step away of feeling the consequences of an insecure tenancy and/or homelessness for their family.

A sole parent family, when undertaking their mutual obligation activities, may do so from a nearby internet café that offers free WI-FI because their own service has been reduced or ceased. These job seekers must be careful not to outstay their welcome as they sip on water and most likely be hungry as food security is also a reality in poor families. It is also likely that they will have ignored their health as health care is now beyond their affordability and it’s no longer universal.[iii]

As a country we then tell the parent who is meeting the demands of sole parenting; providing the care, the love and the nurturing and every other parental aspect, that once they find employment that they will be able to retain $62 of their income per week before their $285.95 it is reduced (Newstart principle carer).

This will occur even if the employment is low paid, part time and/or insecure. We further tell this family that this is the best that they can expect as the already inadequate income free threshold will freeze for the next three-years.

As a country we ignore the plight of child poverty and the impact that it has on the child as they will struggle to reach their full potential and talents. Child Poverty remains concentrated in sole parent families and the Hilda Study again had it as unacceptable and stubbornly persistence at or above 20%.

The child poverty rate is consistently below the community-wide poverty rate, averaging approximately 10% over the 2001 to 2014 period. However, this largely reflects the very low poverty rates for children in couple families. The probability of being in poverty is very high for children in lone-parent families, in most years hovering between 20% and 25%”[iv]

Our policy response to child support is stagnant and it appears that we accept $2.1 BILLION owed in unpaid or underpaid Child Support as we fail to remedy the alarm that children are missing out. The harm grows when policy remains ‘gendered blind’ and we accept the inherent discrepancies in the Superannuation system, a stubborn wage gap and we don’t account for the contribution and cost of providing unpaid care, all of which disadvantages single mothers. The situation is not ‘wicked’ we are not without solutions.

The system is broken but we are not without practical options. NCSMC recommends that the Federal Government:

  1. Immediately restore the Parenting Payment Single, a modest payment that was structured to support sole parent families. It provides a foundation that enables a mother to participate in part-time work and/or study whilst meeting the demands of sole parenting. The Parenting Payment was not ‘poverty proof’ but it is a significant improvement than forcing families onto Newstart when the youngest child turns eight years.
  2. Develop a system where paid work becomes the financial gain for a family and that income free area for Newstart is elevated to that of the Parenting Payment Single. This is a sensible response noting that the Parenting Payment Single was structured for single parents to enter and engage in the labour market and meet the demands of sole parenting.
  3. Institute an income support system that is not a ‘political game’ but rather the product of a reputable and independent body. A body that will make an assessment which is based in solid research and that will quarantine Australians against poverty and build economic resilience.
  4. Guarantee child support, which would immediately cease the practice of post-separation financial abuse and control. The current situation forces mothers to hope that the nominated amount is collected and then paid on time. It’s flawed budgeting and one that families should not have to endure.

We are arguing that there is work to be done; that there are opportunities and the benefits would be immediately felt by the families who are in need. This action should be first in the ‘Order of Business’ and take precedence over Legislation that increases hardship.

[i] Women’ s Agenda Women vulnerable to high cost credit

[ii] news.com.au Hopeless cases the bitter taste of Australia’s employment problem

[iii] Sydney Morning Herald Medical costs forcing Australians to skip healthcare

[iv] The Household, Income and Labour Dynamics (HILDA) in Australia Survey: Selected Findings from Waves 1 to 14 (page 31)