Australian child poverty rate set to soar following end of Coronavirus Supplement, new ANU findings show

Social Ventures Australia (SVA) and the Brotherhood of St. Laurence (BSL) are urging the government to raise income support rates after new modelling research commissioned from the Australian National University (ANU) indicates dire outcomes for child poverty among families relying on social security payments.

The research, conducted by ANU’s Centre for Social Research and Methods, shows that despite sharp increases in unemployment during the pandemic, child poverty rates for children of single parents more than halved during the crisis, falling from 39% to just 17% with the increased income from the Coronavirus Supplement.

However, with the cessation of the Coronavirus Supplement and the proposed JobSeeker increase of $50 per fortnight taken into account, ANU modelling alarmingly predicts that the child poverty rates for single parent families will soar to 41% – more than double the rate during the peak of COVID-19 and higher than pre-pandemic levels.

The situation is even more stark for children under five in single parent families, with poverty expected to increase from 12% to 46% under the new policy settings.

Families receiving working-age allowances continue to struggle on incomes that had not increased in real terms for over 25 years prior to the $50 fortnightly JobSeeker increase this year. ANU’s modelling demonstrates that the increase will do very little to reduce poverty or financial stress, and provides insights on the most economical way for the government to tackle poverty.

“The modelling shows the most cost-effective way to invest additional money on social security payments, and clearly indicates that a modest increase in funding can make substantial reductions in the most severe forms of financial stress and poverty to those who need it most,” said Associate Professor Ben Phillips, lead researcher of the study.

As a result of ANU’s findings, SVA and BSL are calling for the government to increase the rate of income support to ensure children do not continue to live in poverty in Australia. The modelling indicates that a 10% increase (approx. $12 billion) in social security spending would cut the poverty rates for JobSeeker recipients from 88% to 34%.

“The removal of the Coronavirus Supplement has pushed close to 1.5 million adults and over 1 million children further into poverty, leaving many unable to put food on the table or heat their homes in winter,” said Dr Emily Porter, ANZ Tony Nicholson Research Fellow in the Work and Economic Security team at BSL.

Angela Finch’s family is one of many that has been impacted by the changes to income support. The Coronavirus Supplement came at a crucial time for the mother of three, who was able to leave an abusive relationship and secure housing for her and her young children with the additional financial support. However, the end of the payment has plunged Angela and her children back into stressful circumstances.

“Prime Minister Morrison cutting back our support has made things really hard. My kids are lucky enough to have new uniforms this year because my parents were able to help out. What’s happening to the children that aren’t lucky enough to have grandparents like my kids do?” said Angela.

“I try to protect [the kids] from the stress but it’s hard. The other day I heard my 12-year-old telling her siblings not to drink too much milk because money is tight.”

Childhood poverty comes at great cost to individuals, our economy and society. Children experiencing poverty are more likely to undergo developmental delays and experience disadvantage later in life. Poverty also leads to significant social and economic harm, including increased costs in justice, health and welfare.

In addition, financial stress is the biggest cause of relationship breakdown in Australia, with major flow-on effects for children and their parents.

“All children should be able to live happy and fulfilling lives free from poverty. The new ANU research shows that this is far from a reality for many children in Australia,” said Emma Sydenham, Director of Early Childhood at SVA.

“It’s critical that the government commits to sustained investment in the future of our children and families to prevent disadvantage in later life. Our children’s best interests should be at the heart of our policy responses which will also reduce government costs in decades to come.”

  • Associate Professor Ben Phillips, lead researcher of the study, is available to speak to the findings and explain what needs to be done to tackle child poverty in Australia.
  • Angela Finch is available to speak about her experience as a single mother relying on income support.
  • Interviews with spokespeople from SVA and BSL are also available.

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