AUSTRALIAN DEVELOPMENTS IN WELFARE TO WORK Budget

Why change? Both economic and social imperatives  Ageing of the population and slowing of workforce growth  High level of welfare dependency (2.6 million working age Australians on welfare)  Low employment rates and high levels of jobless families

Reform Principles  For working age Australians: –Best form of income comes from a job – not welfare –People on welfare with capacity to work part time should be required to seek work to the level of their capacity –Services for people with a job search requirement should be focussed on getting them prepared for, and into, work

Key areas of change  Payments and work incentives  Work obligations  Services  Employer demand and workplace flexibility

Priority groups  People with disabilities  Parents  Mature age people (50 or over)  Very long-term unemployed

Payments and work incentives  New income test for all working age allowances –More generous income testing to make work more rewarding  Maintenance of concession arrangements

New Allowance Income Test

Work Obligations  Work obligations for a wider range of working age Australians with capacity to work –Parents with school age children –People with disabilities with capacity for part-time work –Mature age people

Services  A significant investment in services to help people move from welfare to work.  New services –Comprehensive work capacity assessments (for people with disabilities)  Pre-vocational Participation Account –Job Network Employment Preparation –Wage Assist

Employer Demand  Funding of $50 million over four years.  Targeted industry strategies –Linking target groups to jobs growth –Encouraging flexible work arrangements  Managing a diverse workforce –Working with industries on best practice age management practices  Strategies to increase demand for workers with a disability –Information & Advisory Service (workers with a disability) –Workplace modification –Wage Subsidy Scheme

People with disabilities payments and work incentives  From 1 July 2006, Disability Support Pension will be for people with less than 15 hours work capacity (new claimants)  Newstart Allowance/Youth Allowance for people able to work hours per week –Part-time work obligation and mutual obligation –Requirements for people with a temporary medical condition

 Extra services –Disability Open Employment Services (demand driven if p/t obligation) –Vocational Rehabilitation (demand driven if p/t obligation) –Job Network (continues to be demand driven) –Personal Support Programme –Workplace Modifications –Wage Subsidy Scheme  New services –Comprehensive Work Capacity Assessment (demand driven) People with disabilities Services

Parents Payments and obligations  Existing recipients will be able to remain on parenting payment –Part-time work obligation from 1 July 2007 after youngest child turns 7  New applicants –Parenting payment while youngest child under 6, no work obligation –Enhanced Newstart when youngest child turns six –Part-time work obligation

Parents Services  Extra services to help parents re-enter the workforce –Extra Job Network places (demand driven)  Including New Employment Preparation service –Child care –JET –Education & training –Personal Support Programme –JPET –Work for the Dole –Community Development Employment Projects  Service Quality Guarantee

Child Care Overview  $266 million package commencing on 1 July 2006  Provides “work first” approach to Child Care Benefit (CCB) usage –Substantial increase in child care places –Additional child care financial assistance for parents on income support  Practical support to encourage Child Care workers –Grants to help FDC workers with “start up” costs –Extra vocational, education and training places for parents and older workers to provide them with the skills for the available employment including child care –Communications and educational material to encourage people to work in child care

Increasing employment for very long term unemployed A wider range of services  Comprehensive Work Capacity Assessment –Where appropriate  Regular Job Network assistance  Wage Assist  Full-time Work for the Dole

Mature Age Australians  Work Obligations: –Job seekers 50+ same job search requirements as other job seekers –Job seekers 55 + can do part-time work and/or recognised volunteering activities of 15 hours or more a week  Services: –New Job Network Employment Preparation service –NEIS places for people not on income support.

FOR AUSTRALIA IMPLICATIONS FOR THE OECD JOBS STRATEGY REVIEW  Labour Demand –Integration into the global economy –A strong economy underpinning labour demand –Innovative, productive and competitive businesses  Labour Supply –Increase workforce participation Meeting the challenge of an ageing population Welfare reform for working age Australians Increased flexibility through workplace relations reforms –Strategies to address skills shortages –Industry based strategies

Questions?