The 2017-18 budget will save the government $632 million in welfare payments, in part thanks to tough new rules that will target and penalise Centrelink recipients that are affected by drugs and alcohol.
Federal Treasurer Scott Morrison said in his budget speech that the government still wanted to support jobseekers and welfare recipients, but that it would have to be a "two way street" for those already struggling with drug and alcohol abuse. A drug test trial will be run on 5000 current welfare recipients, and any of those recipients that test positive for a list of substances will be have their regular payments locked on to a cashless card that can only be used for "essential living expenses."
Welfare recipients that are affected by drugs will also be "subjected to further tests and possible referral for treatment" according to the government, although it also says that those with "genuine issues" will not be "unfairly penalised". Landlords in affordable housing will also be able to deduct rental payments directly from tenants' welfare payments.
This comes in addition to the government's new "three strikes" rule for welfare recipients — a demerit point style scheme where missing one employment appointment without a "reasonable excuse" will have their payments suspended until they re-engage, and repeat infringements see payments suspended completely for as long as four weeks.
Social security and welfare is projected to cost $164 billion in the 2017-18 federal budget, rising to $178b in 2018-19, $184b in 2019-20 and $191b in 2020-21. According to the government, this increase in expenses is due to the impact of a fully funded National Disability Insurance Scheme.
The Government is also strengthening participation requirements for welfare recipients to better drive participation outcomes. These will be coupled with a new targeted Job Seeker Compliance Framework that will apply stronger financial penalties to persistently non-compliant job seekers, whilst ensuring genuinely disadvantaged and vulnerable job seekers are supported. This includes refocusing Work for the Dole activities towards disadvantaged job seekers, and ensuring job-ready job seekers engage in more cost effective Work for the Dole activities. The changes will encourage and support those who have the capacity to work to do so, while ensuring disadvantaged job seekers have the opportunity to develop the characteristics employers look for, such as strong communication skills, the ability to work effectively with others, and reliability.