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Aussies on Newstart have less than $100 a week, after paying rent

Australians on Newstart are spending large amounts of their income on rent. Images: Getty

The federal government is currently considering whether to drug test Newstart recipients, but new research suggests single Australians receiving unemployment benefits are struggling to afford basic necessities.

The analysis from RMIT University’s Simone Casey and Swinburne University of Technology’s Liss Ralston found that a single person receiving Newstart and Commonwealth Rent Assistance in Melbourne would be using 70 per cent of those payments to pay for rent in a share house, leaving an average $98 a week to live on.

That’s $14 a day, which is required to pay for food, utilities, travel and phone and internet bills.

The researchers’ analysis of the Real Estate Institute of Australia (REIA)’s figures for The Conversation found that renters on Newstart in Sydney have an average $48.24 a week to live on, or $6.89 a day.

Northern Tasmania and outer Hobart were named as the only two regions in the entire country where single unemployed people could make rents, but those regions also have significantly higher unemployment rates, the researchers added.

Around 7 million Australians would be required to claim Centrelink benefits if they lost their job, new research has also found today.

Push to increase Newstart

The analysis comes just days after Newstart recipients had their payments increased on 20 September by $3.30 a fortnight, to a total of $559 for single people with no children.

That’s an increase of 24c a day.

“These changes will help welfare recipients keep up with increases in living costs and changes in investment returns,” minister for social services Anne Ruston said.

This is well below the $75 increase the Greens and several social services groups are calling for.

In a submission to the Fair Work Commission’s annual minimum wage review, the Australian Council of Social Services (ACOSS) said a substantial increase was required.

“The level of Allowances now sit well below well below the poverty line,” ACOSS said.

“Youth Allowance and Newstart need to be substantially increased to work properly – helping students to cover the essential costs of living, and ensuring people looking for paid work are not in financial crisis. The low rate of Newstart is acting as a major barrier to securing paid work.”

The Council of the Ageing (COTA) chief executive, Ian Yates, said the government should increase Newstart payments, recognising that there are around 183,000 people older than 50 on Newstart who have been receiving the payments for longer than 12 months, and struggling to find work as an older Australian.

“There are more unemployed workers between 55 and 64 than any other group of Australians and they receive Newstart income support payments longer than any other group as well,” Yates said.

“Older workers face chronic age discrimination in the workforce, which makes finding work after 50 far more difficult, particularly in industries where workforce needs have changed over the decades.

“$40 a day – or $15,000 a year – is just not enough to survive on while people are actively seeking to return to the workforce. If people don’t have enough to cover the basics, people will be dealing with financial stress rather than working to build a future.”

The Australian Labor Party also said it would review Newstart payments as one of its main election pillars.

The government is also considering making Australians with at least $18,000 in savings wait up to six months in order to claim benefits, a move Centre Alliance senator Rebekha Sharkie has condemned as “shortsighted”.

“It is hard to understand why the government is doing this, there is certainly no evidence to suggest that this will magically move people off Newstart,” she told The Guardian.

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