How prevalent is poverty and financial stress in Australian children and families, and what has been the impact of COVID-19?

How much would it cost to address poverty and ensure all children grow up with the same opportunities?

BSL and Social Ventures Australia commissioned the Centre for Social Research and Methods at the Australian National University to undertake research which models:

  • Australian trends in poverty, child poverty and financial stress for families relying on income support
  • the impact of the COVID-19 pandemic and resulting income support changes on poverty and child poverty rates
  • the optimal level of income support required to reduce poverty and financial stress for families and children in the most cost-effective way.

Key findings

This study shows that inadequate social security payments play a large role in shaping poverty and financial stress trends in Australia. By 2017, 66% of children in families whose main source of income was Newstart (now JobSeeker) were living in poverty, up from 25% in 1993. Single parent families are particularly vulnerable, with rates of poverty and financial stress that are much higher than couple families.

Importantly, the research also finds that it is possible to address these challenges. Despite sharp increases in unemployment during the COVID-19 pandemic, child poverty rates for children of single parents more than halved, falling from 39% to just 17% as a result of the $550 per fortnight Coronavirus Supplement.

Modelling shows that increasing overall social security spending by up to 20% would yield strong benefits in reducing poverty and financial stress when targeted towards working age payments, reducing poverty rates for the recipients by up to 75%.

Even a 10% increase in spending would provide JobSeeker recipients with an extra $190 per week and cut their poverty rates from 88% to just 34%, as well as allowing increases for Disability Support Pensioners and those on parenting and carer payments.

Contact Dina Bowman

Publications

Making a difference to children and families in financial stress and poverty , Social Ventures Australia and Brotherhood of St. Laurence.

Phillips, B & Narayanan, V 2020, Financial stress and social security settings in Australia , ANU Centre for Social Research and Methods, Australian National University, Canberra.

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