Unemployed get extra benefits: The Analysis

(Australian Associated Press)


AAP FactCheck Investigation: Are 99 per cent of unemployed people who get the Newstart Allowance also collecting another benefit?

The Statement

“Ninety-nine per cent of people on Newstart are actually on another type of benefit. It might be a parental allowance or another form of support.”

Treasurer Josh Frydenberg. May 6, 2019.

The Verdict

True – The checkable claim is true.

The Analysis

One of the key issues in the federal election is the amount the government pays in unemployment benefits – the Newstart Allowance.

AAP FactCheck examined Treasurer Josh Frydenberg’s claim that 99 per cent of people on Newstart are also receiving another benefit.

The Treasurer made the claim while defending the government’s budget decision not to increase unemployment benefits, stating “two-thirds of the people come off it within 12 months and go into a job” thanks to the government’s job-creation program. [1]

The welfare sector last year called for an increase of $75 in the $277.85 weekly allowance for a single with no children, arguing people on Newstart were living below the poverty line and the allowance for a single person had not risen in real terms in more than two decades. [2]

A Deloitte Access Economics report found that lifting the allowance by $75 a week could cost “a bit over $3 billion”, but would help boost the economy. “What our modelling shows is … if you give a bit over $3 billion to people who spend it, that flows through the economy, you get a bigger economy as a result,” said Deloitte Access economist Chris Richardson, who oversaw the report. [3]

ALP leader Bill Shorten said Labor would, if elected, consider increasing Newstart. [4]

Mr Frydenberg’s claim that 99 per cent of Newstart recipients received other benefits has long been a talking point with coalition colleagues.

In August 2017 when debating the Greens’ Social Security Amendment Bill, Liberal Senator Concetta Fierravanti-Wells told the Senate: “If they (the Greens) had done their due diligence, they would have found out that less than one per cent of Newstart recipients actually receive Newstart alone. The other 99 per cent of Newstart recipients receive additional payments and supplements.” [5]

In February 2018, former social services minister Dan Tehan said about two-thirds of people on Newstart exit income support within 12 months, and “99 per cent receive additional payments and supplements”. [6]

In May 2018 when defending his decision not to raise Newstart in the budget, the then treasurer Scott Morrison said “99 per cent of those who are on Newstart are also on other forms of benefits”. [7]

AAP FactCheck asked Mr Frydenberg’s office for the source of his claim but received no reply, however the Department of Social Services (DSS) provided a statement based on internal data analysis.

According to the DSS, Newstart recipients can receive supplementary payments and allowances including the Commonwealth Energy Supplement, Pharmaceutical Allowance, Commonwealth Rent Assistance, Family Tax Benefit and Telephone Allowance.

People on Newstart were initially excluded from “energy assistance” in the 2019 federal budget but the government later decided to extend a one-off $75 payment to welfare recipients. [8]

A DSS spokesperson told AAP FactCheck: “The (treasurer’s) statement is correct. All recipients of Newstart Allowance are eligible to receive the Energy Supplement. Point-in-time data shows that 99 per cent of recipients receive the Energy Supplement.

“Newstart Allowance recipients can receive multiple supplementary payments in addition to their Newstart benefit.”

Based on the DSS evidence, AAP FactCheck found Mr Frydenberg’s claim to be true.

The Verdict

True – The checkable claim is true.

The References

1: ‘Bill Shorten appears on Q&A after Scott Morrison’s 7.30 interview – as it happened’, by Amy Remeikis and Gabrielle Chan. The Guardian. May 6, 2018:https://www.theguardian.com/australia-news/live/2019/may/06/federal-election-2019-labor-coalition-polls-politics-live?page=with:block-5ccfa8ae8f086f179813be5e#liveblog-navigation

2: ‘Push to raise Newstart allowance by $75 a week’, by Luke Henriques Gomes. The Guardian. September 17, 2018: https://www.theguardian.com/australia-news/2018/sep/17/push-to-raise-newstart-allowance-by-75-a-week

3: ‘Newstart allowance should be raised, Liberal senator Arthur Sinodinos tells Q&A’. ABC. April 2, 2019: https://www.abc.net.au/news/2019-04-02/newstart-allowance-should-be-raised-arthur-sinodinos-liberal/10961688

4: ‘Bill Shorten confirms Newstart will increase under Labor’, by Phillip Corey. Australian Financial Review. May 6, 2019: https://www.afr.com/news/politics/national/bill-shorten-confirms-newstart-will-increase-under-labor-20190506-p51kok

5: ‘Parliamentary Debates. Bills. Social Security Amendment (Caring for People on Newstart) Bill 2017’. The Senate. Commonwealth of Australia. August 2017: https://parlinfo.aph.gov.au/parlInfo/genpdf/chamber/hansards/d24ca78e-5af5-4c87-8715-9d4b6604d5f0/0182/hansard_frag.pdf;fileType=application%2Fpdf

6: ‘Coalition warned welfare overhaul could worsen poverty and unemployment’, by Christopher Knaus. The Guardian. February 13, 2018: https://www.theguardian.com/australia-news/2018/feb/13/coalition-warned-welfare-overhaul-could-worsen-poverty-and-unemployment?CMP=share_btn_tw

7: ‘Revealed: Only one major business group opposes Newstart increase’, by Luke Henriques Gomes. The New Daily. May 10, 2018: https://thenewdaily.com.au/money/welfare/2018/05/10/newstart-greens-push-rejected/

8: ‘Extending power bill relief to Newstart recipients blows $80 million hole in budget’. SBS/AAP. April 2, 2019: https://www.sbs.com.au/news/extending-power-bill-relief-to-newstart-recipients-blows-80-million-hole-in-budget

* AAP FactCheck is accredited by the Poynter Institute’s International Fact-Checking Network, which promotes best practice through a stringent and transparent Code of Principles.


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