The largest age demographic on the Newstart Allowance are people aged 55+. As submissions to the Senate Inquiry into the adequacy of Newstart and related payments roll in, Policy Whisperer Susan Maury (@SusanMaury) and Sarah Squire (@SquireSarah), both of Good Shepherd Australia New Zealand (@GoodAdvocacy) unpack what this means for older women. Drawing on case studies and reflections from Good Shepherd’s financial counsellors, they outline key concerns and policy solutions to improve outcomes for women experiencing poverty later in life. This analysis draws from Good Shepherd’s submission to the Newstart Inquiry; you can access the submission here. We are focused on the experiences of older women for Anti-Poverty week; you can also read a first-hand account of what goes wrong for older women here, in Lorraine’s story.

Women are vulnerable to economic insecurity due to gendered policy settings and social norms, including ideas about ‘women’s work’ and caring responsibilities. Drivers of systemic gender inequalities include high levels of unpaid work; lower levels of workforce participation, including a greater likelihood of working part time; lower pay; discrimination and sexual harassment in employment; and experiences of family and sexual violence (see pp. 12-13 here).

Nowhere is this more apparent than in the lives of women aged 55 and over. A stark increase in housing precarity and homelessness among this group – particularly for those at the mercy of the private rental market – suggests an urgent policy response is needed.

Older women and Newstart

While fewer women receive Newstart than men – approximately 195,500 women compared to 239,000 men – older women have the hardest time getting off Newstart, with those aged 55-59 years spending an average of 191 weeks on the payment, compared to 185 weeks for their male counterparts.

The age group most reliant on Newstart is people aged 55-64 – just over 173,000 – compared to only 62,500 people aged 21-24 years. This age group also stays on Newstart longer; people aged 55-64 stay on Newstart for an average of 3.5 years, compared to under a year for those under 25.

Older women have not been sitting still, but disadvantage still accumulates across the lifespan. This needs to be recognised in the policy response. Photo by eberhard grossgasteiger from Pexels — Older women have not been sitting still, but disadvantage still accumulates across the lifespan. This needs to be recognised in the policy response. Photo by **eberhard grossgasteiger** from **Pexels**

Women in their 50s and 60s are often dependent on income support to make ends meet due to interrupted employment histories and life events which combine to create a trajectory towards poverty in old age.

Recent analysis indicates that increasing the age of Age Pension eligibility from 60 to 65 for women has not impacted financially on higher income households, however low to middle income households have experienced an increase in poverty rates of between 33 and 39 per cent.

Furthermore, it is single women and women in low-SES households who have offset the delay in the pension by increasing their employment participation, while women in more prosperous households have offset the income loss in other ways. For older women who have difficulties accessing employment, the delay in receiving the Age Pension is placing them in significant hardship.

Older women’s stories: Jenny and Hannah[i]

For a woman in her 50s, losing a job can be disastrous. Skilled, confident and resourceful women who have worked all of their lives can find themselves on a path to economic insecurity within months of a job loss. Take the experience of ‘Jenny’, one of Good Shepherd’s clients:

Jenny is in her 50s. As a single mother she raised 4 children while working part-time. When her youngest moved out of the house 10 years ago, Jenny increased her hours to full-time work as a specialised office worker. On this salary she was able to maintain a modest life – putting away a bit of savings each month, paying her rent on time, covering her other expenses and having a bit left over for social outings with her friends. When her employer shut down 12 months ago, Jenny did not think it would take long for her to find similar work. She used her savings to cover her rent and other expenses while she looked for work, but after 6 months with no job prospects she had fallen into arrears with her rent for the first time in her life. Jenny has had to move out of her rental and ask friends whether she could rent a room since this is all she can afford on Newstart. After faithfully paying off her modest credit card debt each month, Jenny soon found herself unable to cover even the minimum payment. A Good Shepherd financial counsellor was able to negotiate a debt waiver for the credit card of about $4,000 which is a relief for Jenny, but it has not solved her problem of too little money to cover her basic expenses. One option is to take an advance on her superannuation but this is a short-term solution only, and will leave her with reduced retirement savings.

To receive Newstart Jenny was required to meet with a jobactive provider, and she found the case workers to be pushy and aggressive. She was forced into taking a 6 hour per week job at a coffee shop that was a 30 minute drive from her home. This employment was financially counterproductive due to the low wage and low number of hours, and at times she did not have the funds for petrol. Jenny became so stressed her doctor wrote her a medical exemption so at least she can now conduct her own job search without feeling pressured to take positions where she cannot use her skills or to lead an independent life.

Jenny is now financially constrained and her mental health has deteriorated as a result. She had to cancel a much-needed doctor’s appointment because she did not have the money to put petrol in her car, and has cut out fresh foods from her diet to save money. She is considering putting her name on a waiting list for public housing but the wait can be many years for women in similar circumstances so it hardly seems worth the effort.

Good Shepherd financial counsellors see many older women who have accrued significant debt due to the low amount of Newstart, particularly those who have significant health issues but who are deemed ineligible for the Disability Support Pension. This is the case for one client who we will call ‘Hannah’, who is in her early 60s and has been on Newstart for 5 years. Formerly an office worker like Jenny, Hannah brought her children up as a single parent and now has multiple health diagnoses in addition to caring responsibilities for an elderly parent. Hannah has already accessed and exhausted all of her superannuation savings. Despite careful budgeting she comes up $300 short per month, and she is still years away from qualifying for the Age Pension. Good Shepherd financial counsellors note there is simply not enough income for this cohort of women and high levels of unresolvable debt. As one concedes:

If a client is on Newstart and in the private rental market, there’s no point in doing a budget. There is simply not enough. As a result, there are multiple debts accruing that will never be paid.

Financial counsellors advise that these clients survive on advances from Centrelink. The social security system keeps individuals so impoverished that they are perversely forced into debt to the system itself.

Policy solutions to address poverty among older women

An obvious and immediate solution to the economic insecurity that Jenny, Hannah and others like them are experiencing is to increase the rate of Newstart and related payments such as Commonwealth Rent Assistance – or, acknowledge that this demographic is not the ‘short term unemployed’ that the Newstart Allowance is designed for, and place them on a payment appropriate for their employability.

At a broader level a systems approach is needed to tackle the various impediments women encounter in their efforts to secure adequate income – within and across the social security system, the labour market, the tax and transfer system, the child support system, and childhood education and care – above and beyond their unpaid work. Access to health care and appropriate early intervention and response within the family violence system, and better access to crisis payments and longer-term financial support for victim survivors of domestic and family violence, are critical foundations for women’s economic security. Better policy supports for women returning to work following childbirth are needed, such as improvements in paid parental leave (higher amount, longer length and a portion reserved for dads/partners) and a better funding model for child care to avoid the inevitable fee increases that result from increases in subsidies to parents. Factoring unpaid care work into calculations for social security payments and changes to superannuation to reduce the structural bias towards men, such as those recommended by the Make Super Fair campaign, could dramatically improve the standard of living for women later in life.

Civil society advocates, social commentators, educators and others must also continue to highlight the need to change gendered social norms so that unpaid care work and labour market work are spread more evenly between women and men across the life course.

In a country as wealthy as Australia there is simply no justification for any of our elders to be experiencing financial stress and hardship, especially those who have spent their lifetimes caring for others.

[i] Case studies are de-identified.

This post is part of the Women's Policy Action Tank initiative to analyse government policy using a gendered lens. View our other policy analysis pieces here.

A long and winding road to nowhere: older women’s experiences of Newstart