This article was revised on 26th July 2019 because there was an error. Mr B had asked a Centrelink person if there was a Travel Allowance for someone on Newstart (unemployment benefits). He was told that there was a Mobility Allowance of $97.90 per fortnight. As it happens, he was misinformed. That Mobility Allowance only applies to a disabled person.
Therefore, the total income is only $701.70 per fortnight. Total expenses are seen to be (on the high end): $764. Therefore, a person on the Newstart Allowance would be short $63 per fortnight, or $31.50 per week.
Therefore, Mr B recommends that the NewStart Allowance be raised by at least $63 per fortnight.
The revised article:
There are different situations in which a person may become elligible for unemployment benefits. For example:
(A) those who have saved their money and have a financial buffer, and have become unemployed.
(B) those who have not saved their money and have no financial buffer, and have became unemployed.
(C) single parents with children.
(d) parents with children
This article looks at the position of someone in category (B): “Can a single unemployed person over the age of 22 – without having saved a financial buffer – live a good life and seek work on unemployment benefits?”
The current Newstart Allowance benefits are:
(source: Aust govt)
A single person receives $555.70 per fortnight.
A room in Sydney will always be at least $305.33 a fortnight, so the fortnightly payment from the government will be $137.20.
Plus Energy allowance
Total income for a single person, per fortnight:
$555.70 Newstart allowance
$137.20 Rental assistance
$8.80 energy allowance.
Therefore, $701.70 is the total income received per fortnight by our single person.
The Newstart allowance is to provide a person with a decent standard of living and the support they need in their endeavours to find a job. The taxpayer should not be obliged to fund a Newstart recipient’s:
– take-away food
– restaurant meals
– recreational drugs
– bottled water & soft drinks
– tea & coffee
That’s not the view of some people, though. One grasshopper asked, “Why shouldn’t someone on the Newstart payments be able to go out drinking and have a good time?”
Another grasshopper, when asked why the taxpayer should pay for cigarettes and alcohol, blurted, “Why should people be forced to live in horrendous conditions?”
A person could find on flatmates.com.au a room in a shared house in Sydney for $200 per week. However, Kim has poor social skills and no one will live with her. Kim needs to have her own room, so she rents a room in a boarding house and pays $225 per week. Kim is paying $450 rent per fortnight.
Let’s assume Kim lives in an outer suburb and has one job interview a week in Sydney’s CBD. That’s $14.80 a fortnight. Let’s say Kim can’t buy her groceries on the same trip, and she lives a long bus or train trip to the nearest shopping centre. Therefore she has to spend another $20 per fortnight in public transport fares. Total: $34.80
Tax: $0. The Newstart allowance is $555.70 per fortnight, or $14,448.20 per year. The tax free threshold is $18,200 a year. Therefore this is no tax to pay. (The rental assistance and energy assistance allowances are tax exempt.)
Gas and electricity.
The socialite Mr B lives alone in a big house. He tells me that using arithmetic and his last four electricity and gas bills, he has determined that per fortnight, his cost of electricity is $28.08 and gas is $19.48.
Total energy costs: $47.56 per fortnight.
(Water? In most instances when someone is paying rent, the water bill is paid by the landlord.)
Telephone and internet:
Internet: all libraries in the Sydney greater area provide free internet access. There an unemployed person can send and receive emails from prospective employers, as well as hunt for jobs. Cost: $0.
Telephone (to speak with prospective employers): $10 per month for a cheap phone plan. That’s $5 per fortnight.
Clothes: An unemployed person will need smart clothes for job interviews, and quality goods can be found in op shops. (Mr B found a quality suit on his first attempt for $20.) However, if a person presents proof they are on unemployment benefits, they can receive clothes & shoes for free (and presumably, blankets.)
Socks, underpants and singlets need to be bought, let’s say at a generous average cost of $8 per fortnight.
Haircuts: For job interviews the applicant needs a presentable haircut. A woman told Mr B that generally a friend can cut a basic hair cut. And, there are Youtube videos showing how it can be done. However, this claim will be rubbished, so let’s include the cost of a professional haircut: Men’s haircuts: 8 a year at $12 each. That’s $4 a fortnight. Women’s haircuts:
a) Some hairdressing schools will have their apprentices cut a woman’s hair for $25. However, results aren’t guaranteed.
b) The firm, ‘Just Cuts’ will cut a woman’s hair for $32. At six times per year that’s roughly $240 per year. That’s less than $8 per fortnight. Hair dye, six times per year will cost $10 each time. That’s $60 a year or just over $2 per fortnight.
$8 + $2 = $10 is the average cost per fortnight Kim will pay. (Men: about $4.)
Most shared houses have washing machines, and most apartment blocks have communal washing machines and driers, that cost $2 per wash and $2 for the dryer. But let’s assume Kim has to use a laundromat to wash and dry her clothes. Twice a fortnightwill cost her $18 per fortnight.
– toothpaste (the brushing cleans your teeth, not the lather). Besides, toothpicks and floss are even more important.
– laundry detergent. It’s the washing machine’s surging water that rids your clothes of sweat, etc., not the detergent. If you have an item with grime on it, hand wash the affected areas first with a bar of soap. Mr B hasn’t used laundry detergent for eight years.
– lipstick, perfume and eye liner.
Cost: $0 per week.
– The chemist informed Mr B that an unemployed person will pay a maximum of $390 per year for prescribed medicines. Let’s say Kim has medical issues and will spend the entire $390 each year. She will be paying on average $15 per fortnight.
– bars of soap:
– toilet paper (a handy hint to save money: use both sides)*
– toothpicks or dental floss:
– washing-up liquid:
– Tampons and pads
– other stuff I’ve forgotten.
Total fortnightly cost: Generous estimate:$18
It’s commonly said that people on the Newstart allowance cannot afford fresh food, and are forced to buy take-away food. Here are some examples of the prices of take-away food:
So, a cheap meal can be bought for $5 or $6.
Mr B said anyone suggesting that bought meals are cheaper than fresh food is, at best, mistaken. I asked Mr B to put his money where his mouth is. (He agreed to do so, but first had to remove his foot.) For a week he meticulously recorded the cost of the food he ate, and took photographs for proof. Here we go:
Note: Instead of expensive wine, Mr B uses a cheap wine substitute for most of his meals. Although it’s often included in the photographs, the cost is not included because it’s negligible, and because an unemployed person does not need to purchase alcoholic beverages in order to survive.
Breakfast: Two bowls of cereal, (Freedom’s ‘Buckwheat & Quinoa Active Balance) with oat milk.
Cost: $2.40 for both bowls.
Morning snack: banana.
Cost: 36 cents.
Dinner: 1/3 rump steak fried with mushrooms & onions, plus three other vegetables.
Breakfast: Free range eggs, tomatoes, chilli, on grain & seed bread.
Total cost for Tuesday: $12.07
Breakfast: Two bowls of cereal, (Freedom’s ‘Buckwheat & Quinoa Active Balance) with oat milk. Plus apple.
Cost: $2.40 plus:
Lunch: two bananas on grain & seed bread.
Dinner: 1/3 rump steak with eight vegetables.
Total cost for Wednesday: $10.82
Breakfast: Two free-range eggs, two tomatoes, chilli, on grain & seed bread.
Lunch: Avocado on grain & seed bread. Plus one banana.
Dinner: Stir-fry on rice: 1/2 salmon, beans, broccolli, carrot, beetroot, capsicum, mushroom.
Total cost for Thursday: $9.93
Dinner: Stir-fry on rice: 1/2 salmon, beans, broccolli, carrot, beetroot, capsicum, mushroom.
Total cost for Friday: $14.52
Breakfast: Apple, plus Two bowls of cereal, (Freedom’s ‘Buckwheat & Quinoa Active Balance) with oat milk.
Cost: $2.80 for both bowls.
Lunch: Toasted turkish bread sandwich with margarine, tomato, onion, Jarlsburg cheese, an egg, chilli, avocado & lettuce.
Dinner: Borscht. (gravybeef, beetroot, celery,
Total cost for Saturday: $10.20
Breakfast: Toasted turkish bread sandwich with margarine, tomato, onion, Jarlsburg cheese, an egg, chilli, avocado & lettuce.
Dinner: Canned pilchards with tomatoes, onion & garlic on rice.
Total cost for Sunday: $9.84
Total food expenses for one week: $78.83 Therefore: per fortnight: $157.66
TOTAL EXPENSES PER FORTNIGHT
47.56 gas & electricity
Total expenses: $764.02
Given that the total income is $701.70,and that total expenses are $764.02 that means the unemployed Kim is short $62.32 per fortnight, or $31.16 per week. Of course, in most cases those expenses assumed the highest costs possible. For example, if Kim didn’t have poor social skills and her many health problems she would be paying $400 per fortnight instead of $450, and $5 per fortnight for medicines instead of $15. However, the Newstart Allowance should cater for people like Kim, which means the current Newstart Allowance for a single person 22 years or over is not adequate and should be raised by at least $63.
How about for a single parent? For a couple? I don’t know.