Job-search Pain For 70,000 - Income Test Crackdown
The Age
Friday August 25, 1995
About 70,000 unemployed people have had their job-search allowances cut because of the Federal Government's new income test for people seeking work.
Over Fifties Focus, a national lobby group for older people, said changes to the income test, which took effect last month, meant that job-seekers earning between $60 and $196 a fortnight from part-time work would be worse off.
Under the old income test, job-seekers could earn up to $140 a fortnight in part-time work without having their allowances cut. People earning more than $140 a fortnight had their allowances cut by $1 for every extra $1 they earned. Under the new test, job-seekers are penalised 50 cents for every $1 they earn over $60 a fortnight. Those earning more than $140 are penalised 70 cents in each extra $1.
The Federal Government justified these changes on the grounds that they would benefit 59,000 people and motivate the rest to get more paid work. Over Fifties Focus said this approach ignored the discrimination faced by older people seeking work.
The chief executive of Over Fifties Focus, Ms Jean Elder, said: ``The reality is that for many, especially older job- seekers, extra work is simply not available and 50 per cent of discouraged workers are in the older age group.
``The older long-term unemployed have become the forgotten generation, displaced by the rapid changes in technology, company restructures, government rationalisation and an employment system which constantly reinforces the hiring of younger people.
" Over Fifties Focus said the new income test discriminated against older people seeking work. But a spokesman for the Minister for Social Security, Mr Baldwin, said this was not true.
He said an analysis of figures from May 1994 showed that of those job-seekers who would gain from the change, 12.2 per cent were older people and of those who would lose 10.
5 per cent were older.
Mr Ted Smith, of Ringwood North, is one of the 70,000 people whose income has fallen because of the changes.
Mr Smith, a member of Over Fifties Focus, was made redundant in 1992 after 40 years of full-time work. He invested his savings and expected to live off the interest until he turned 65, when he planned to use the capital to fund a private pension income.
Last year, when the interest from his investments fell, Mr Smith became eligible for a Job Search Allowance of $272 a fortnight. Under the income test at the time, he was able to work part-time (``just some electronics work, only one day a week"), earning $69 a week, without the allowance being cut.
But now that job seekers are allowed to earn only $60 a fortnight before having their allowances cut, Mr Smith's allowance has fallen by $20 a week.
``I really cannot see the point of doing any more work," he said yesterday. ``To be told to get a better-paid job or perhaps another part-time job is easier to say than to do when the applicant is beyond the mid-40s."
© 1995 The Age