Evidence for welfare reform: Generosity may have unforeseen benefits for women and children

The newly-elected Labor government announced during the campaign that they would not be looking at welfare reform in the near term. In today’s analysis, Policy Whisperer Susan Maury (@SusanMaury) of Good Shepherd Australia New Zealand (@GoodAdvocacy), Elise Klein (@EliseJKlein) of ANU, Policy Whisperer Kay Cook (@KayCookPhD) of Swinburne University, and Kelly Bowey of the Centre for Excellence in Child and Family Welfare (@CFECFW) share a summary of their research that indicates raising the rate and removing compliance requirements would support women to increase their productivity, both in their paid and unpaid work. This article is drawn from a paper entitled Gendered impacts of changing social security payments during COVID-19 lockdowns: An exploratory study.

The Australian welfare system, while ‘gender-blind’ in its official stance, has highly gendered outcomes (see also here, here and here). Most prominently, there was an outcry when the Gillard government moved thousands of single mothers onto the (then) Newstart Allowance, increasing their poverty levels almost overnight. There has been a long and sustained campaign to ‘Raise the Rate’ with broad support, but it has met with strong resistance from decision-makers at the federal level.

The Coronavirus Supplement: A natural experiment

All of that changed at the start of the COVID-19 pandemic in early 2020. The Coalition government announced a doubling of allowances (with no change for pensions), based on the logic that looking for employment during the pandemic was an unrealistic expectation. This temporary policy change was accompanied by a suspension or relaxation of mutual obligation requirements – tasks, such as applying for jobs, attending meetings, or volunteering that are required to continue receiving allowance payments. The change in rate was provided as an additional payment, called the Coronavirus Supplement, which was initially set at $550 per fortnight starting in late April 2020 and paid for 6 months. The amount was then incrementally reduced until it ceased completely on 1 April 2021; in its place a permanent (but meagre) $50 per fortnight increase was provided.

Caring work is currently unrecognised by our welfare system as ‘legitimate’ work. A more generous, less punitive welfare system would have many benefits for women and children, including supporting a holistic view of productivity. Photo credit Pixabay.

This unprecedented, if temporary, shift in welfare policy was a golden opportunity to understand what an increase in payment to a liveable standard, accompanied by the reduction or elimination of invasive surveillance policies, would mean for people who were reliant on these payments. We were particularly interested in what it might mean for women, and whether it supported them in their unpaid work load. The work of running a household and providing care is largely ‘women’s work,’ but remains unrecognised as ‘productive’ in government consideration of employment status.

Furthermore, many women remain on payments designed for people who are short-term unemployed, but an analysis conducted by the government itself indicates that many people, and particularly women, are placed on these allowances despite having a reduced capacity for paid employment for such reasons as caring for children, having a disability, being older, experiencing family violence, having mental health challenges, and/or living in rural/remote areas with few viable employment options.

Here we report on what women told us about how the temporary changes to the welfare system experienced in 2020/2021 impacted on their time use and overall sense of health and wellbeing. This is drawn from an article that is published here. If you are interested in more general findings (without a gender lens), we have published a general report that can be found here.

Women felt supported in parenting

Several respondents said that the extra money helped them to feel like ‘good parents.’ Specifically mentioned were the ability to purchase clothes and food, seek medical or dental help for children, provide some pocket money, and send children on school outings. One mother said, “It has made me feel like a good parent being able to actually care for my children.”

Reduction of financial stress

The extra money enabled women to meet their financial obligations and have some extra money to pay down debt, put aside some savings, and/or provide small treats for the household (specifically mentioned were providing hot chocolate, cereal, and books and games). One woman said, ”[It] improved our family life, [we] felt more secure and it improved my mental health to not worry about bills and not being able to do things.” Others said the extra money helped them stay connected with family and friends and support local businesses that were struggling.

Improved mental health and wellbeing

Improved mental health was perhaps the most mentioned change, often linked to the reduction in financial stress. For many women these changes were profound. A single mother said, “I was able to direct my thoughts away from the constant worry and calculation of every penny to productive and creative activities and thinking.” Several people mentioned sleeping better and feeling an overall better sense of physical and mental health.

Increased sense of agency and hope

The increased financial security and the reduction in compliance requirements worked together to give many respondents a sense of control and purpose over their lives, supporting longer-term planning. Several respondents indicated that they were spending more time focused on building a positive career trajectory through study, targeted job searches or starting a small business. One woman mentioned several changes she experienced as a result of a less punitive, more supportive system: “My mental health has been the main thing, I’ve actually felt worthy. My bills are all paid on time… I’ve ben able to give my children a normal life like other children, and I’ve been able to go back to study so that I have a chance at a better future. I guess it gave me some hope!”

Changes were short-lived

Our survey was administered after the first reduction in the amount of the Coronavirus Supplement, from $550 per fortnight to $250. Many people mentioned the return of financial worries, having to cut back on healthy foods and medicine, the return of poorer sleep patterns and a sense of foreboding that further reductions were imminent. For example, one single mother said, “Pressure, stress and anxiety started. I began to worry about bills, financial, health,” while another said, “The anxiety is crippling. I’m so nervous. With the cost of basic groceries going up I already can’t sleep, it’s gotten harder to live already.”

Evidence-based policy?

The federal government has a recent history from both parties of keeping welfare payments deliberately low, as an incentive to move back into paid work quickly. However, our findings indicate that increasing payments may be a better policy response, at least for the women who responded to our survey who have difficulty engaging with the labour market, may be unable to work full-time hours, or may need time to reskill and create a viable career trajectory to ensure their household’s financial stability. Furthermore, the consequences of poor diets, deferred medical attention, compromised mental health, and the financial stress of being unable to meet all their bills contributes to poor mental health and a reduced capacity to engage in ‘productive work’, whether paid or unpaid.

It was disappointing to hear that an increase to JobSeeker and other payment rates would not be considered by the Labor government in the near future. The research reported here suggests that deferring an overhaul of the welfare system is unnecessarily harming women and their children – and more than that, creating barriers for women to create a viable pathway to financial security in the longer term.

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.

Posted by @SusanMaury