By Sibylle Kaczorek
On July 1 the federal government will introduce the Youth Allowance to replace the Youth Training, Newstart and Sickness Allowance, and Austudy for unemployed people under 21 years old and full-time students under 25. The YA has been promoted as a positive social policy reform. In fact, it has serious negative consequences for young people and their families.
The YA will not be paid in full to unemployed young people whose parents' income, including maintenance payments, is over $23,400 per year. For a one-child family, it will not be paid at all to 16-17 year olds whose parents' income is over $38,522, or to 18-20 year olds whose parents earn over $41,579. These young people are expected to live at home and be financially dependent on their parents, and will receive no financial support if they leave home.
Thousands of young people who have received Newstart unemployment benefits since the beginning of the year and who receive rent assistance because they live in share accommodation, but whose parents earn over $41,579, will lose all of their dole money and rent assistance. Rent assistance will only be available to young people who have to live away from home for work or study reasons.
No doubt, some young people will return home, and thousands of parents will be made financially responsible for their grown-up children, not because they are economically able to support them, but because the government is giving them no choice. For those young people who can't return home, obtaining an income through crime may be the only option.
To deal with problems of inappropriate or abusive family situations, the government is offering some exemptions. These apply mainly to situations where there is severe abuse in the family home. Situations in which parents are treating their adult children in a humiliating or degrading (but not physically abusive) way are unlikely to qualify.
Young people who have access to welfare workers will have a better chance of arguing their case, but those in more difficult circumstances or who are inexperienced with the welfare system are less likely to get an exemption.
For those unemployed 18-21 year olds who are eligible for part or all of the YA, the government has introduced the policy of "mutual obligation". These young people will have to do some form of community or voluntary work to receive the YA. Non-compliance will lead to financial penalties and, if repeated, to having their payments cut off altogether.
Even worse off are 16 and 17 year olds, who will not be considered unemployed since, as of January 1, 1999, they will be forced to do either full-time study or full-time training in order to qualify for the YA. When they do qualify, their payments will be made to their parents.
Young people who have decided to leave school — either because the education system is inappropriate for their needs, or because they prefer practical to theoretical work, or because of financial hardship in their family — will not be eligible for the YA.
Forcing young people back to school will also affect other students and teachers, who will have to integrate these reluctant students with minimal additional funding.
The marketing of the YA in television ads and glossy Centrelink propaganda as a "simple", "flexible" great step forward is utterly hypocritical. The government's own draft Youth Allowance Media Strategy, leaked earlier this year, acknowledged that all of the negative effects raised in submissions and protest actions by youth and community workers are to be expected. The paper clearly states that the YA will cause family disputes, encourage family breakdown and cause more youth homelessness. It also states that $23,000 is a low means-test threshold.
Nevertheless, blaming dole "bludgers" and young people who "only want to leave home to rage", helps the government to shift responsibility for high unemployment rates away from their failed economic system to young people who are "simply not willing to work".
In the longer term, despite the high initial implementation costs, the YA will save the government a lot of money. It will also pave the way for further restricting welfare payments down the track. The accompanying rhetoric of "mutual obligation" is being used to justify making individual families pay for what the system refuses to provide.
In the shorter term, the introduction of the YA will help the government electorally by causing an immediate (if only temporary) reduction in the youth unemployment figures.