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Plan to get more off welfare

A MASSIVE $3.6 billion overhaul of the welfare system is aimed at getting more people into work to meet the nation's growing demand for labour.

A carrot-and-stick approach will be used by the Federal Government to wean parents, disabled pensioners, mature workers and the long-term unemployed off welfare cheques.

From July 1 next year, parents will progressively be forced back into the workforce once their children reach school age. New welfare recipients with bad backs and other disabilities will also have to prove why they cannot work 15 hours a week at award wages.

To accommodate the changes, lower-income workers can look forward to tax cuts to encourage people to move out of welfare into jobs and employers will be offered incentives to hire parents, the disabled and long-term unemployed.

But, in a sign of the Government's determination to break the welfare cycle, it will not hesitate to penalise those who fail to meet their obligations. For repeated, serious non-compliance, welfare payments could be suspended for up to eight weeks.

Mr Costello told Parliament the measures were not about saving the government money and, indeed in the short term, would cost the nation financially.

"We should now aim for an economy where every Australian who wants to work can find it," he said.

In moves widely predicted before the Budget, Australians on parenting payments after July 2006 will be expected to at least look for part-time work when their youngest child turns six and is ready for school.

The Government will move to make the transition easier by boosting access to child care.

In Queensland alone, there are more than 100,000 people on single-parent payments. An average of 300 people also join those receiving the Disability Support Pension each day - 70 in Queensland - at an estimated annual cost of $8 billion.

But the crackdown in this area will be limited to new people joining the scheme - meaning anyone seeking to go on a disability pension on or after July 2006 will be required to undergo a new work test.

If they are assessed as being incapable of working 15 hours a week, they will receive the pension.

But, if they are assessed as being capable of 15 to 29 hours per week, they must work and will receive an enhanced Newstart ($250 a fortnight) allowance instead.

There will be transitional arrangements, including periodic work assessments, for those who join the scheme in the interim.

Incentives and penalties mark the Federal Government's welfare-to-work measures.

Parents, disabled pensioners, the elderly and long-term unemployed wanting to get off welfare and into a job will find a range of new and expanded services at their disposal.

A new "compliance framework" shows the Government is serious about cracking down on anyone attempting to rort the system.

From July 1, 2006, jobseekers who do not meet a "participation requirement" will have their welfare payments suspended by Centrelink until they meet their obligation. For repeated - or more serious - breaches of the system, payments could be suspended for up to eight weeks.

As well, anyone who knowingly lies about their earnings faces being lilt with a 10 per cent "recovery fee" for earnings-related debts.

Employment and Workplace Relations Minister Kevin Andrews said the Government had a responsibility to taxpayers to ensure, that individuals do not claim payments or levels of assistance to which they were not entitled.

The public will also be urged to dob in a dole-bludger. But a key principle of the welfare-to-work reforms is that those who are ,obliged to look for work receive appropriate help to find it.

This Budget includes more than $2 billion in incentives. A Wage Assist subsidy will be offered to employers for 13 to 26 weeks to hire long-term unemployed.

Disabled pensioners who can work between 15 hours and 29 hours a week will have access to the Pensioner Concession Card, Pharmaceutical Allowance and Telephone Allowance.