How effective is our Social Security System?

On Tuesday I will be facilitating a discussion about the above topic.

I'd be very appreciative of ASF members' opinions on this.

Do you think the Social Security system (Centrelink) for the most part looks after the needs of our society?

Do you think we are too paternalistic and should apply tougher restrictions as to who receives benefits?

Do you think self funded retireees are treated fairly in that they don't receive the concessions which are available to people on government pensions?
i.e. if they have planned and saved sufficiently well to not quality for a government pension, should they not be rewarded by having access to reduced rates, registration, pharmaceuticals etc?

Is the $4000 baby bonus actually going to the people whose children are going to benefit our society? Or are many of these children destined to grow up as yet another link in the chain of multi-generational welfare?

Should more of Australia's surplus wealth be spent on assisting people with mental illness, or dental schemes, or simply to prop up our ailing hospitals?

All suggestions would be very welcome.

Could you perhaps score the system out of ten: i.e. a '1' means you think the system is entirely dysfunctional and unequal, and a '10' means you think it's really useful, very fair and equitable.

With thanks.

Julia

I'm quite happy for some of my taxes to be used to help those in need. That's a necessary part of a fair society in my opinion and I think the present system, whilst nowhere near perfect, isn't too bad when all things are considered.

But I am totally opposed to any form of welfare that has as it's primary objective meddling in some market. The First Home Owners Grant is one and I think it's done more harm than good for first home buyers - the money ends up in the hands of sellers, not buyers, from what I've seen.

The baby bonus is another. I'm aware of several instances of women having children to pay off bills, credit cards etc rather than because they actually want the child. If we insist on providing financial assistance with raising children, then it needs to be in some form other than upfront cash. Vouchers, payment of ALL school fees, free child minding etc rather than handing over actual cash or its electronic equivalent. Cash too easily finds it's way to the bottle shop, TAB, pokies, smokes etc.

Welfare should be for those who, for whatever reason, either can not work or have already done their share (old age pension). That includes those seeking work but unable to actually get a job despite genuinely trying, disabled, sick etc. Welfare shouldn't be for those who see it as an alternative to work because they simply can't be bothered working.

As far as I am aware, its one of the best models in the world.

Centrelinks main aim is to help those in real need, meaning you must use your own assests first before drawing on welfare.

I have used the system a couple of times throughout my life, as a student (Austudy), and as an unemployed person (Newstart). I think on the whole it has served its purpose and allowed me to study and look for for while being able to pay my rent, put food on the table and pay my bills etc.

Hi Julia,

I think the system works quite well, however with any such system, there will always be a minority that abuse it.

We know a couple of people who are recipients of welfare payments – one is on a disability pension and the other on a single parent’s pension who also suffers from a medical condition as well as depression. In both cases, it has allowed them to live independent lives which would otherwise not be possible.

I was grateful for it when I found myself as a sole parent with three kids aged 10,14 and 16 and had been a stay-at-home Mum up till that time. The ex had been sacked from his job due to his problems, so not much help from him financially. For me to have to re-train and go out to work on top of the other shocks being handed to us at the time, would have only added more stress. So, again, I feel the system worked well and stepped in during a time of genuine need.

On a trip to the states some time ago and while driving around we saw many people sitting on the side of the road with signs “will work for food”. So while our system is not perfect, it does at least provide for mostly for those in genuine need, IMO.

There is a certain amount of discipline and inconvenience for recipients of welfare – such as standing in queues (perhaps that has changed now!); having to get forms in on time; having to comply with certain conditions; sorting out mistakes make by Centrelink that have caused a cut to payments. But then if it was too easy, there would be no motivation to become self sufficient again.

I think one of the most difficult things with Centrelink (if the current affairs programs are to be believed!) is when they get it wrong and try to turn honest people into criminals – very stressful for those people.

Re the baby bonus – seems like the treasurer wants more Aussies regardless of whether they grow up with a welfare mentality or not. He would have to be aware that those with good incomes are not going to be swayed by a measly $4000 to have another child, however, it’s a lot of money to those already on welfare and also means increased fortnightly income once the child is born – often with little increase in overheads such as rent. You would have to think the treasurer knew who would be enticed to start producing more Aussies!

Anyway, my and have rated it a 7. All the best with your discussion on Tuesday!

Margaret.

Hi Julia,
Pity such a short notice, so not everybody will have time to voice their opinion.

I am appalled that monies are given so easily to very young people who don’t want to conform to house rules and run away from parents.
Most of the times, money are spent on inappropriate items and Government assisted accommodation is inappropriately used.

Child $4k bonus is improperly used, and even if it was in a form of vouchers it could be misappropriated too.

Antisocially behaving members of our community have it too easy to be total nuisance to other members of our community.
Unsightly backyards and communities should be investigated and encouraged to be tidy and then forced to be tidy, and charged for extra expenses to look after their area.
Maybe there should be bonus in a form of higher rent assistance to exemplary tenants irrespective of their welfare position, as a form of thank you for carrying.

Bucket loads of money should be poured to health system, to the point of suspending some foreign assistance and or reducing immigration.

Self-funded retirees have fairly raw deal.
But the problem is the available funds scales not the concept.
Due to inflation today $500,000 is not a fortune any more.
In some up market retirement villages with medical supervision, every time pressing -nurse button- can cost more hundred dollars.
Assistance to self-funded retirees should fade at much higher levels.

As welfare in general it is fantastic concept, envy of many countries, but if we have all communities on welfare or 2 or 3 generations on welfare, there should be some kind of compulsory employment system as obviously this is example of gross welfare abuse.

Recovery of funds from welfare fraud should be more vigorous, to create incentives to be honest.

Hi Julia

I think the $4000 baby bonus is a great intiative and especially effectove if it combined with sound financial planning and career pathway options.

Cheers
Happytrader

i actually work in the employment area and from first hand experience i can tell you it does not work.

for the amount of people that actually require help there would be another 5 abusing the system.

it is way to easy for people to slip through the cracks and just sit on the dole. there are no real enforcements to actually make people look for work and for 75% of the Job Network Members clients on centrelink payments do not turn up to appointments.

the govt is getting slightly stricter (only slightly) in that next year people on parenting payments with children over the age of five will be required to look for work.


i think the system that the US uses is very effective. you can use benefits provided you require them for up to two years in your lifetime and that is it. if you decided to sit on welfare for two years without getting a job then bad luck you wont get any more financial help.

i also have a gripe with the people working cash in hand and claiming centrelink benefits. these people also abuse the system and increase taxes for the rest of the country, and believe me there is a huge amount of ppl who do this. ppl are led to believe that most people claim their work, well most people dont.

i just think the system is ridiculous it does help some people who really need help but it also leaves a system wide open for abuse. they need much stricter guidlines in place to reduce the way the system is abused.

From ABC

October 16, 2006
Fraud against companies increases

A new survey has found that hundreds of Australian companies have been the victims of fraud and the problem is getting worse.

Accounting firm KPMG surveyed more than 465 private and government organisations on whether they had experienced fraud in the last two years.

Of those who did, the crime cost an average of $700,000.

KPMG spokesman David Van Homrigh says fraud is usually committed by a long-serving male employee with no history of dishonesty.
"Motivated generally by greed and gambling is often a issue," he said.

"Usually the fraud by this mythical average fraudster is detected by the company's internal control systems is detected about a year after the commencement of the fraud."

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Not entirely appropriate here, but just another confirmation, that too many people use fraud to obtain benefit in one way or the other.

Where did it start?
Hard to say, but affects Centerlink and many other institutions, not to mention private people.

Many thanks to everyone who has voted so far and added comments.

Happy, no reason the thread should finish by tomorrow afternoon, but yes, I should have thought of it earlier.

Please keep voting.

All your comments are really helpful and appreciated.

Julia

My thoughts about the welfare system....

It covers the needs of those who require it, unfortunately it also covers others who dont!

The baby bonus - didnt the ownership of plasma TV's increase the very week that the baby bonus was introduced? I would like to see the baby bonus limited to the first three children - any more than that no bonus! I would prefer a kind of voucher system but that would be very difficult to administer I guess!

The need for families to estimate their income is really difficult and would seem this is the main area that families end up with a huge bill to pay through under-estimation of family income.

Not too sure how I feel about single mothers with children of multiple fathers being rewarded for their reproductive capacity!

I would like to think we could bring about a culture change of welfare being an entitlement and not a right; I despair of generational welfare dependancy.

The worst case of abuse of it I know is not from a family of low socio-economic level - but of a very wealthy family whose business interests are tied up with trusts. The women would bring their kids to kindy in Mercedes vehicles, have gold dripping off them (lucky gals : ) and then hand over their 'free school card' because none of their money was paid as income!



I rated it 6 -

Happy said:

Hi Julia,
Pity such a short notice, so not everybody will have time to voice their opinion.

I am appalled that monies are given so easily to very young people who don’t want to conform to house rules and run away from parents.
Most of the times, money are spent on inappropriate items and Government assisted accommodation is inappropriately used.

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I am not sure where you are getting your information from, but it sounds like it could 6:30 current affairs shows, or some sort of 3rd hand anecdotal "evidence". Having worked as a social worker i can assure you the following:

1) 99.9999% of kids who leave home do so because they are abused e.g bashed up, raped etc etc etc. The stereotype that kids leave home because their parents are too strict is simply untrue.

2) Money paid to children (yes remember they are children) is very minimal. Could you envisage living off 200 or so bucks a week? You would need to get used to two minute noodles in a hurry.

smoothsatin said:

I am not sure where you are getting your information from, but it sounds like it could 6:30 current affairs shows, or some sort of 3rd hand anecdotal "evidence". Having worked as a social worker i can assure you the following:

1) 99.9999% of kids who leave home do so because they are abused e.g bashed up, raped etc etc etc. The stereotype that kids leave home because their parents are too strict is simply untrue.

2) Money paid to children (yes remember they are children) is very minimal. Could you envisage living off 200 or so bucks a week? You would need to get used to two minute noodles in a hurry.

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Smoothsatin

Agreed here. I see these young people all the time and they have been victims of often quite horrendous physical and sexual abuse.

I'm alarmed, however, at the looseness with which Centrelink will accept their assurance that they are better off staying with friend A, and the family tax benefit (or whatever it's called at present) is paid to that person rather than the parents. A few days ago we had a 14 year old who was going into "the care" of a 21 year old who had a history of bankruptcy, substance abuse. and continuing relationships with violent partners. Hardly an example to a vulnerable 14 year old!

However, there are some instances of kids who simply won't accept living with what most of us would consider fairly reasonable rules for an under 16 year old who will if they think it will help their case accuse a family member of sexual abuse when such an accusation is entirely without foundation.

All up, this area probably requires much greater social work resources than are presently available to it.

Julia

smoothsatin said:

Could you envisage living off 200 or so bucks a week? You would need to get used to two minute noodles in a hurry.

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I've just been told that age pensioners do that all the time??????????

Yes the current (aged) pension payment is $512 per fortnight, it is possible to live off that money, as thousands of people do. Just means that many of the comforts of life are put on hold.

Austudy is around $335 ish

Newstart is around $420 ish

Stop_the_clock said:

Austudy is around $335 ish

Newstart is around $420 ish

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Thats per week isnt it? The pensioners have brought it on themselves mostly. They also (mostly) paid their taxes so theyre probably entitled to something. My wifes grandparents still get a pension but are sitting on a million dollar property; not fair IMO.

Milk Man said:

Thats per week isnt it? The pensioners have brought it on themselves mostly. They also (mostly) paid their taxes so theyre probably entitled to something. My wifes grandparents still get a pension but are sitting on a million dollar property; not fair IMO.

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So, they should sell the house they have probably lived in all their life, try to buy another cheaper one, just so they can live???? That is not fair!

Aged Pensioners (people aged over say 70) deserve all the money they can get. Remember they have seen three wars (WWII, Korea and Vietnam), and these wars were not sanitised - soldiers died every day. (How would our media cope - it goes into a frenzy when 1 Oz soldier dies now!) - the depression, did not have access to Superannuation contributions from the employer. Their fathers fought in WWII with few war benefits being paid in kind. They saw Polio epidemics and watched their schoolfriends die because there was no vaccine, These people are not Baby boomers - they were born before that so these people have had it tough!

Milk Man said:

Thats per week isnt it? The pensioners have brought it on themselves mostly. They also (mostly) paid their taxes so theyre probably entitled to something. My wifes grandparents still get a pension but are sitting on a million dollar property; not fair IMO.

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No that is per fortnight

Prospector said:

So, they should sell the house they have probably lived in all their life, try to buy another cheaper one, just so they can live???? That is not fair!

Aged Pensioners (people aged over say 70) deserve all the money they can get. Remember they have seen three wars (WWII, Korea and Vietnam), and these wars were not sanitised - soldiers died every day. (How would our media cope - it goes into a frenzy when 1 Oz soldier dies now!) - the depression, did not have access to Superannuation contributions from the employer. Their fathers fought in WWII with few war benefits being paid in kind. They saw Polio epidemics and watched their schoolfriends die because there was no vaccine, These people are not Baby boomers - they were born before that so these people have had it tough!

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No one is owed anything, infact taxes paid today are used today. Taxes paid yesterday have already been spent. People seem to think if they work all their lives or battle in wars that they are owed a pension, this is not actually correct. As they work or fight in wars and pay taxes through their lives they use many of the resources paid for by tax payers. They use hospitals, roads, schools, public transport, etc etc. This is one of the biggest mis-conceptions of a welfare system, and who is owed what, how, when, where and why.

Stop_the_clock said:

No one is owed anything, infact taxes paid today are used today. Taxes paid yesterday have already been spent. People seem to think if they work all their lives or battle in wars that they are owed a pension, this is not actually correct. As they work or fight in wars and pay taxes through their lives they use many of the resources paid for by tax payers. They use hospitals, roads, schools, public transport, etc etc. This is one of the biggest mis-conceptions of a welfare system, and who is owed what, how, when, where and why.

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STC

You may well be right on a purely material level, but I would hate to think we are fostering a society where we feel no obligation to care for people who have reached the age where they can reasonably expect to retire from the work force. In the same way, we should always care for people with illness or disability.

I agree with Prospector: why should older people be forced to sell their homes which are often modest but mean a lot to them just to survive from week to week. Fortunately, reverse mortgages do mean they can generate some cash without actually selling the home.

If you think pensioners here get too good a deal then I can't begin to imagine how you would regard the NZ system where the pension is not even means tested! Everyone gets it at age 65 regardless of assets and income.
I have no idea how it's funded.

Julia

Stop_the_clock said:

No one is owed anything, infact taxes paid today are used today. Taxes paid yesterday have already been spent. People seem to think if they work all their lives or battle in wars that they are owed a pension, this is not actually correct. As they work or fight in wars and pay taxes through their lives they use many of the resources paid for by tax payers. They use hospitals, roads, schools, public transport, etc etc. This is one of the biggest mis-conceptions of a welfare system, and who is owed what, how, when, where and why.

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That isnt totally what I was saying. This group of people (70+) have been totally disadvantaged. Superannuation didnt exist for these people, their employers were not required to put away 9% of their income into Super! They grew up in the understanding that when they retired the pension would be there if they needed it.

And you really think we dont owe them anything for what they did in WWII? Surely we owe them enough for them to have a comfortable lifestyle now, (ie not have to sell their family home just to eat!) not having to live day by day just to exist! But that debt stops with them, I agree, we dont owe any other generation the way we owe those aged around 70 now! And as for them using hospitals - my experiences of older people's treatment in our public hospitals has been nothing short of disgraceful! And they are a tad old for school. But will leave that rant to ACA!