Budget 2020 MESL Pre-Budget Submission
Issued: June 2019
Summary
This submission to Government presents evidence based policy recommendations, based on the MESL 2019 analysis of minimum needs and income adequacy.
The 2019 MESL assessment identified households headed by one adult and households with older children as having the greatest degree of income inadequacy, when dependent on social welfare. This submission outlines the adjustments required to address the systemic issues which are behind the persistent deep income inadequacy found amongst these household type.
The annual MESL analysis has tracked notable progress in the reduction of the adequacy gap between social welfare rates and the cost of an MESL from 2014 to 2019. Compared to 2014, significantly more social welfare dependent household test cases now demonstrate income adequacy, and there is a reduction in the adequacy gap for those household compositions continuing to demonstrate income inadequacy.
This progress is due to increases in the value of primary social welfare rates while the cost of an MESL has remained relatively stable over recent years. Despite this progress deep income inadequacy persists and is now exclusively found in households which are headed by one adult, i.e. single working-age adult and lone parent households, or in households with older children.
The concentration of deep income inadequacy in these household types is due to the current structures of the social welfare system underestimating the minimum needs and costs for one adult headed household relative to two adult headed households, and older children relative to younger children. The concentration of deep income inadequacy in these household types highlights systemic issues in the accepted equivalence scales which inform the relativities between social welfare rates of payment.