Could you survive on $38 dollars a day?
Ella* is in her late thirties and shares a house with three other people in Punchbowl in South Western Sydney. She receives the Commonwealth Government Newstart allowance for job seekers, which provides single people with no children $269.40 a week. Recently, after paying for her rent and usual expenses like food and daily travel costs, Ella found that she didn’t have enough money to pay for her electricity bill. Her flatmates were in an equally tight spot with money and the bill just didn’t get paid. The electricity was switched off and the household lived in the dark for two weeks until they got the money together to make the payment, through emergency relief assistance from the Bankstown Community kitchen.
Stories like Ella’s are far too common. As the cost of housing and basics continue to rise, many people have to choose between paying the rent so they can keep a roof over their head and paying for the other essentials they need to survive.
The latest statistics show that across Australia there are over 500,000 low-income households living in rental stress, meaning that they are spending more than thirty percent of their modest incomes on rent. That doesn’t leave much of a buffer, to save for unexpected costs. Small changes in their financial circumstance, such as an unexpected health cost or the need to buy a new fridge, can really affect their ability to pay rent, throwing them into precarious and stressful situations. In the private rental market, missing rent payments can too quickly lead to eviction and the risk of homelessness.
Figures released by the Social Policy Research Centre in September show that single people surviving on Newstart would need up to $96 per week more to cover their regular expenses, while for a couple with two children it’s $126 that’s needed . Even with supplements and rent assistance income support payments are falling well short of the income that’s actually needed to cover bills, food and rent. This is leaving families and individuals with unacceptable choices.
Some households on low incomes are taking out personal loans to cover immediate expenses. Small time lenders will provide cash up front but charge exorbitant interest rates, trapping people in a cycle of debt.
The community kitchen in the Bankstown area that’s run by the Salvation Army and attended by other local support services including Mission Australia is always full. The $2 cost of a meal is still more than some people can afford. Our staff say that people doing it really tough will show up with their bank statements as evidence that they just don’t have anything to spare after paying their rent and bills.
Budgets are even tighter when living off the Youth Allowance, a payment that is designed to support young people as they finish their studies, undertake an apprenticeship or look for work. Ruby* had to leave home when she was 16 and has been living in share houses ever since. She is now 19 and the $218.75 she receives each week has to cover her rent, bills, food and the cost of travelling to school each day. The trip into the inner-suburbs of Adelaide takes Ruby more than an hour each way, because living closer to the city is too expensive. There are days when she doesn’t go to school, as she’s waiting for a payment to come in and can’t afford a bus ticket. She often has to delay paying her phone and electricity bills, and Ruby is worried about how those late payments will affect her credit rating later in life.
This week is Anti-Poverty Week, a timely reminder that we need all sides of politics to commit to an adequate social safety net and make the necessary investment to support people in need. As a society, we recognise that it is good for us all when every person in our community has income support to meet their basic needs and participate in our community. The social security system is something most of us contribute to and benefit from at some point in our lives. Whether it be while studying, looking for work or caring for others. It really is a social good and provides a critical safety net.
When income support payments don’t cover basic needs, it has terrible impacts on the people depending on that support but also impacts our community more broadly.
Every person in our community should feel supported through difficult times in life and be able to keep the lights on. Every young person should have the money they need to catch the bus to school and receive a quality education, setting them on a path to achieve their full potential. Income support must be a true support, not a pathway to poverty.
*Names are changed to protect the identities of the people we work with
CEO Mission Australia
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