10 October 2018

Delaying benefit payments is saving the government millions

Source: www.theage.com.au

Scott Morrison’s first message to the people of Australia after being anointed Prime Minister was “we’re on your side”. It was a welcome change in message after he had previously used the term “taxed and the taxed-nots” as federal treasurer to describe the social security system.

The change in language is particularly welcomed by financial counsellors, who work with some of the most vulnerable people in the community, advising them of their rights and options when they are in financial difficulty. Each and every working day, they hear distressing stories – of people struggling to pay for the basic necessities of life; of having to choose between buying food or paying the electricity bill; of paying the rent or fixing the car, which is the only way they can get to work.

But after being involved in some recent cases involving social security payments, it has become clear to me that it is more than just the language that is going to need to change. Recent reports pointing to a $6.3 billion reduction in the amount spent on social security and welfare last financial year, with family tax benefit payments alone down $790 million, have only served to reinforce this point.

I am also left wondering whether our federal MPs are aware of the treatment of vulnerable people that lies behind the ‘’savings’’; and whether they are aware of just how loaded the system is against people who are vulnerable – financially and emotionally.

“James” was receiving Newstart and rent assistance, giving him $351 a week on which to live. After paying rent of $230, he was left with $121 a week. Three months ago, he was granted custody of his seven-year-old daughter following a marriage break-up. The very next day he applied for the Family Tax Benefit payment. He was entitled to the extra payment of about $145 a week and goodness knows he needed it – what with an extra mouth to feed, clothes and school uniforms to provide, and keeping his unit connected to power during winter.

Yet 10 weeks later he had still not received any extra payments. He had received text messages from Centrelink saying it was processing his claim but that it could take some time. Then last Thursday, he was told he would need to reapply for the family tax payment. No apology for the stuff-up in processing the claim; no acknowledgment of the desperate financial situation he was in trying to look after two people on $121 a week. The only acknowledgment was that Centrelink would backdate the payment to the date of his second application. Centrelink has no obligations to provide any reasons for delays in processing claims.

Compare James’ treatment with that of “Josh” – a tech-savvy fourth-year university student. He applied for Youth Allowance 13 weeks before his 22nd birthday. Some two months later he had still not received a response from Centrelink. So he went online and searched various forums for advice on how to speed up the glacial pace of approvals.

On one forum he was told to contact Centrelink and threaten that he would raise a complaint with the ombudsman and his local federal MP. Josh did just this and three days later he was notified that his application had been put on the urgent list. A few days later he was told the start date of his payment – just a week later than expected.

Yet whose was really the more urgent case? The desperate father who had an extra mouth to feed and had to choose between heating his home or putting food on the table or the student who had parents willing and able to support their son until Centrelink came through?

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It shouldn’t really come down to urgency at all, but these cases show that what matters is whether you have the wherewithal to know you have certain rights and the confidence and emotional strength to access your rights.

So when I read about the social security savings I thought about all the payments that people are entitled to but aren’t receiving as soon as they should. The treatment of James alone saved the government close to $1500. And according to community groups, delays are increasingly common for all sorts of Centrelink payments, including the age pension. In July, Fairfax Media reported the case of a 65-year-old woman who had been waiting five months for her age pension claim to be processed. In another case, a 20-year-old student had been waiting four months for her youth allowance claim to be processed.

While Centrelink is not required to work within any time limits to process applications, applicants have to jump through numerous hoops regarding lodging their paperwork on time. For example, when a person applies for the disability support pension and Centrelink refuses the application, that person has 13 weeks to lodge their documentation to appeal against the decision or their payments won’t be backdated if they do win their appeal.

And while payments may eventually be backdated, what about the many, many months of hardship that have been caused in the meantime? What about the once-secure housing that has been lost because there was no money to pay the rent? Or the car that has been repossessed because there was no money to pay the car loan? Or the emotional toll of having to constantly juggle bills; of living with the threat of disconnections; and of going to bed hungry each night?

Elizabeth Minter is a financial counsellor with the National Debt Helpline – www.ndh.org.au  1800 007 007

 

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