Antipoverty Centre letter re: Proposal to change the income free area and taper rate for welfare recipients

We are writing to highlight our past advocacy in relation to changing the income free area and taper
rates for people who have paid work but rely on social security payments, and to encourage you to
make these changes to allow people to keep more of their employment earnings.

It is unfair that people who are already living in poverty and working, who are discriminated against and are doing their best only to be held back by our archaic social security system, are financially punished for working. Increasing the income free area and taper rates will go a long way to helping the 1 in 5 people on unemployment payments who have paid work survive in the face of extreme living cost increases.

Key recommendations;

• Make the income free area consistent with the current Youth Allowance (student) and Austudy rules, enabling people on all payments to earn $480 per fortnight before any reduction in their social security payment.
• Reduce the taper rate to 25 cents in the dollar for all payments. This change would reduce the current effective marginal tax rate of 79 cents in the dollar for people above the tax free threshold to 44 cents in the dollar – which would still leave people on the lowest incomes losing basically the same amount per dollar as people in the top income tax bracket.

You can read the letter in full below.