Women, work and welfare in the activation state: an agenda for Australian research.

• Author: Cortis, Natasha
• Position: Contributed Article

Abstract

Welfare-to-work programs are now enduring features of Australia's labour market and social policy landscape. Over two decades, both Labor and Liberal governments have progressively tightened the conditionality of income support, extending principles of mutual obligation to new groups of working age recipients. This article is concerned with legislation that came into effect in 2006 requiring sole parents who receive income support to enter the labour market when their youngest children reach school age. This policy has practical implications for the character and dynamic of the labour market, and for caregiving, family wellbeing and women's autonomy. After outlining recent Australian reforms, we examine how comparable overseas reforms have impacted on the independence and wellbeing of vulnerable, low income women; and use emerging themes to outline an agenda to guide the next phase of Australian welfare to work research.

Introduction (1)

Welfare-to-work programs are now firmly established features of Australia's labour market and social policy landscape. Both Labor and Liberal governments have progressively tightened the conditionality of income support over two decades, by extending principles of 'mutual obligation' to new groups of working-age recipients (Eardley et al. 2005). The process began with the introduction of activity testing for the long term unemployed in 1988, which was followed, during the 1990s, by tightening of job search requirements on recipients of unemployment benefit and the introduction of Work for the Dole for 18-24 year olds who had been unemployed for 6 months or more. Justified by principles of mutual obligation, compulsory job search and participation, requirements have since expanded further, with Work for the Dole progressively rolled out from 2002 to include all those under 40 years of age who had been receiving unemployment benefits for 12 months. More recently, welfare-to-work programs have been extended yet further, to include people with disabilities and sole parents receiving income support. This article is concerned with the reforms aimed at sole parents that were introduced by the Howard Coalition Government (1996-2007), phased in from 2006, and which are being maintained under Labor (2007-).

In adopting welfare-to-work or 'activation' policies, Australian governments are engaging in a significant reorientation of social policy that is occurring in many other rich democracies. Cross-nationally, welfare-to-work policies share common ideologies, aiming to promote responsibility, self-reliance and other desirable attributes of citizenship. They draw broad support from international institutions (see, for example, OECD 2007), and emerge from deliberate policy transfer. Concern about rising dependency on income support and a reframing of the problem of unemployment from a problem of inadequate demand for labour into a problem on the supply side of the labour market both played a role in this change of social policy direction (DEWR 2007a; Larsen and Andersen 2009; OECD 2007; Peck 2001; RGWR 2000). Whether framed as a problem of economic incentives, due to high replacement rates in income support systems, or a problem of moral failing on behalf of the unemployed, the solution was the same: people of working age should be working. Benefits for the economy and public finances were clear in expectations of falling welfare spending, expanded labour supply and increased tax revenues. Benefits for those on income support have also increasingly come into policy discourse, through concepts such as social inclusion. From this perspective, participation in the labour market has economic, social and moral benefits, and by moving from welfare to work, income support recipients also move from a state of social exclusion to inclusion.

In Australia the Rudd Labor government has strongly emphasised labour market participation in its social inclusion agenda. Indeed, the first point in its official definition of social inclusion is that 'all Australians must be given the opportunity to secure a job' (Australian Social Inclusion Board 2008). Another small, but highly symbolic, gesture demonstrates the connection between social inclusion and labour market participation in Labor's approach. In July 2008, Patricia Faulkner, chair of the Social Inclusion Board (established in May 2008), was appointed to chair the Participation Taskforce established by the government to look into barriers to work faced particularly by parents (2) and mature workers (O'Connor 2008a).

Sole parents are certainly one of Australia's most vulnerable social groups, and it is clear that reliance on income support contributes to the very high level of poverty which they experience. Sixty-one per cent of sole parent households relied on income support payments for their main source of income, compared to 8 per cent of couple families in 2003-04; and 41 per cent had low incomes and low wealth, compared to 14 per cent of the population overall (ABS 2007). Yet it remains an open question whether coercing these Australian mothers to participate in paid work through a welfare-to-work program is the most humane, effective and expeditious way to improve their lives and those of their children. We seek to contribute to answering this question. After outlining recent Australian reforms, we examine how comparable reforms overseas have impacted on the independence and wellbeing of sole parents on income support and use emerging themes to outline an agenda to inform the next phase of Australian welfare-to-work research.

Evolution of Participation Requirements for Sole Parents

Since the welfare-to-work legislation came into effect in 2006, unprecedented numbers of Australian sole parents have faced requirements to prepare for, seek and sustain paid work once their youngest children reach school age. Under the Australian version of the male breadwinner model, deserving sole parents--first war widows, then all widows and deserted wives, expanding to include all single mothers, then single parents--were entitled to income support by virtue of their caring responsibilities. Since the welfare-to-work reforms, Australia no longer offers income support to sole parents in their role as carets once their children are of school age. (Meanwhile, partner families with stay-at-home mothers continue to enjoy preferential treatment under the family tax benefit system (Apps 2006).) Thus, change in the treatment of sole parents represents a very significant change in the structure of the Australian welfare state, as social policy developments engineer a shift from the 'male breadwinner family model' to the patchy, Australian version of an 'adult worker family model'. (3) Accordingly, changes to the eligibility criteria and conditions of income support for sole parents have practical implications for the character and dynamics of the labour market and for care-giving, family wellbeing and women's autonomy.

Welfare-to-work programs for sole parents began in 2003, under the 'Australians Working Together' policy. A recipient of Parenting Payment (PP) whose youngest child was aged 13 to 15 faced a new requirement--to engage in approximately six hours per week of paid work, job search, education or voluntary work. The changes announced in the Federal Budget of 2005-06, and introduced in the Family and Community Services Legislation (Welfare to Work) Bill 2005, took welfare-to-work much further for this group and others. (4) The new legislation required PP recipients to undertake 15 hours per week of job search, voluntary or paid work once their youngest children were seven (or six for new claimants). Further, the legislation provides for only temporary exemptions from 'participation requirements', for example due to family breakdown or violence, illness or a lack of transport or childcare. When their youngest children turn eight, sole parents now become defined by their unemployed rather than caring status and are transferred to Newstart Allowance (NSA), with its lower payment rate, tighter income and activity tests and a more punitive compliance regime.

Unless the labour market program dimensions of the new policy are very successful in moving sole parents into sustainable jobs of reasonable quality, early research suggests that the impact of welfare-to-work programs on the economic fortunes of this already disadvantaged group will be detrimental. In May 2009, the maximum rate of Parenting Payment Single (PPS) was $569.80 per fortnight, compared with a maximum NSA (for a single person with children) of $490.40. (Child related payments are calculated separately, and are the same for both groups.) Modelling undertaken prior to the changes (based on benefit rates at that time, and taking into account differential taper rates and other circumstances) predicted the incomes of parents on NSA would be $29 per week less than PPS for a jobless recipient and $63 per week less for a parent studying full-time (ACOSS 2005a). Losses (in the order of $92-$95 per week) were predicted for sole parents with one child over eight years with weekly private income of between $200 and $400 (Harding et al. 2005).

Backing up changes to payment structures and workforce participation requirements are compliance arrangements which add benefit control (called income management, welfare quarantining or financial case management) to existing sanction systems, which are based on benefit withdrawal for 'breaches' or 'failures' by recipients. In the first year under the new welfare-to-work legislation, 15,509 eight week non-payment penalties were applied to job seekers (SSCFPA 2007) for 'serious participation failures' (such as being dismissed or resigning from a job or failing to participate in full-time Work for the Dole without a reasonable excuse) or the third 'participation failure' in a year (such as not fulfilling job search requirements or attending a Job Network...