Social Welfare in Australia

Social Welfare in Australia Social security in Australia is a system of social welfare payments provided by the Commonwealth Government of Australia. These payments are administered by the Department of Human Services. Most benefits are subject to a means test.

Payments are made to a variety of groups of people; Indigenous students and New Apprentices, age pension, assistance for isolated children (families with a child who lives a fair distance from school), carers, disability support pension, foster families, maternity payment, people who are looking for employment, parenting payment, special benefit (financial hardship) and youth allowance. 7. 1 million Australians were “customers” of Centrelink, many of which claimed from child care.

The payments are paid for through general taxation. In Australia only citizens may claim these benefits. Centrelink is the agency which manages social security. Australia gives out social welfare payments to ensure more equal dispersion of wealth and to assist the lower socio-economic population. In many people’s view in Australia it is the government’s responsibility to look after the less well off, whereas in other countries, for example China, people might rely on their immediate family, for instance to look after the elderly.

Australia is the most “efficient” at reducing inequality of any rich country. In Europe, the United States and Japan, social security is financed by contributions from employers and employees, with benefits related to past earnings, therefore the higher income workers received more generous benefits if they become unemployed, disabled or retire. The rationale for Australia’s approach is that it reduces poverty more efficiently by concentrating the available resources on the poor and minimises adverse incentives. The extent to which the Australian welfare state redistributes to the poor is determined by the interactions between the tax and social security systems, both in terms of the size of taxes collected and the distribution of these taxes. This is calculated by estimating the level of spending on social security benefits as a percentage of household disposable income and then taking account of how much of this goes to the poorest fifth. The same procedure is used to calculate how much tax is paid by people in that group, which is then subtracted from the benefits received to give “net redistribution to the poor. ”1 “The main objective of social security systems in most countries is to provide insurance against risks like unemployment, disability and sickness, and to redistribute income across the life cycle. ”2 There is also the “Robin Hood” motive; take from the rich and give to the poor, which Australia is a strong example of because our system relies heavily on income testing and directs a higher share of benefits to lower income groups than any other country. Australia has the most “target efficient” system of social security benefits. Some examples of social security payments given out are:

ABSTUDY is the Aboriginal and Torres Strait Islander Study Assistance Scheme and is for Indigenous Australians undergoing some form of study. All Indigenous students at secondary or tertiary institutions and primary students 14 years and older. The student must be of Aboriginal or Torres Strait Islander descent and be a current Australian citizen. The Disability Support Pension provides income support for people who suffer a long-term disability which they will not recover from in the next two years, which will determine them unable to work. The average person will receive $385. 0 monthly. The Parenting Payment is for those who are carers of dependent children under the age of 8. These customers are able to collect this payment until their youngest child turns 16. The Parenting Payment uses an individual and a partner income test to determine the rate of payment. Means and assets tests are applied to reduce the incidence of welfare fraud and contain social security spending, so as not to “rip off” the taxpayers. In 2012-2013 the Australian Government contributed $132 million towards social security and welfare, this made up 34. % of total government expenditure. In Australia, welfare is the largest component of public spending and therefore is the main determinant of how much tax income needs to be collected. Bibliography: Wikipedia, Social Security Australia, 2013, http://en. wikipedia. org/wiki/Social_Security_(Australia), Retrieved 20 February 2013. Whiteford, P. , Inside Story, 2013, http://inside. org. au/how-fair-is-australia’s-welfare-state/, Retrieve 20 February 2013. Riley, T. , 2013, Year 11 Economics, Sydney, Tim Riley Publications.