Earlier this year homelessness services were on tender hooks awaiting announcements about whether the National Partnership Agreement on Homelessness would continue and in March, the Federal Government announced $115m for a one year extension of the partnership. In contrast, the Victorian Government has locked in its $124 million commitment to the Agreement for four years (see full ACOSS analysis here).
The Victorian State Budget committed $65 million over three years for maintenance and upgrades of public housing. The Federal Government has also maintained the National Affordable Housing Agreement, but unfortunately neither of these measures grapple with the ongoing housing affordability crisis.
NRAS Scrapped: the Federal Budget has discontinued the National Rental Affordability Scheme (NRAS). The scheme was initially established to deliver 50,000 newly constructed rental properties to be let at a discount rate. However, the Federal Government will honour funding commitments that have already been allocated to 30,000 properties.
Waiting period and limits to Newstart Allowance: People under 30 who become unemployed will have to wait six months before receiving Newstart and Youth Allowance payments. Payments will be cut off again after six months while recipients participate in work for the dole schemes, meaning income support will only be available for six out of every 12 months. Exemptions apply for those caring for children, those in Disability Employment Programs or people with complex needs assessed as Stream Three or Four in the Employment Services Model. The maximum waiting period can be reduced, by one month for each year previously in paid employment, until a one month minimum waiting period is reached.
Raising the eligibility age for Newstart Allowance: the eligibility age for Newstart Allowance has been raised from 23 to 25. This means a reduction of $45 a week in income for 23 and 24 year olds.
The indexation of pension payments: linking pensions to Average weekly earnings has made sure that pensions (unlike Allowances such as Newstart) can support a decent standard of living relative to the rest of the community. Indexing the pension to CPI will over time mean that the real incomes of pensioners will decline. The change to indexation of Aged and Disability Pensions commences on 1 January 2015, but for Parenting Payments this change takes effect almost immediately from 1 July 2014.
Limiting Family Tax Benefit part B: The budget has reduced the means testing threshold for FTB part B from $150,000 to $100,000 and limited eligibility to people with children under six years of age. When a child turns six FTB part B, which currently provide a maximum payment of over $3,000 a year will be replaced with a $750 annual payment to low income single parents.
Other impacts include merging the Australian Institute of Health and Welfare with six other health reporting agencies to form the Health Performance and Productivity Commission, and changes to funding for programs that are directly funded by the Federal Government.
Another major concern for the homelessness sector is the seven-dollar Medicare co-payment for GP consultations and out of hospital pathology that will come in from 1 July 2015. Already low income households who have to cope with the high cost of housing think carefully about every dollar they spend. Increasing costs to visit the GP will discourage people from seeking early medical attention.
Many people relying on income support are already struggling with housing affordability. For example, one in four Youth Allowance recipients are currently experiencing housing stress, even with Commonwealth Rent Assistance. Similarly, reduction in the real income of pensioners is likely to force more people into housing stress and homelessness. Although the most significant changes are to income support and not homelessness sector itself, they will hit those without family and social networks the hardest and put more people at risk of becoming homeless.