Wednesday, June 04, 2008

CPAG want beneficiaries to get more than the minimum wage

The MSM has reported on the case [also here] taken today by the Child Poverty Action Group (CPAG) on the In Work Tax Credit (IWTC) aspect of the Working For Families package, maintaining that not to give this tax credit to beneficiaries is allowing children to live in poverty.

What struck me was that the CPAG defines poverty as living on less than 60 per cent of the median income - about $43,000 a year after tax. Assume that includes WFF payments. Many families with cars and mortgages will be living in poverty if it wasn't for WFF as it means that if you are an average sized family earning less than $33,000 you`re living in poverty and CPAG thinks you should get the In Work Payment whether you work or not.

But if you are on an income tested benefit, the CPAG thinks you deserve it more than if you are a low income family on , say $30,000 who works 29 hours a week. Should the CPAG win its case, beneficiaries may* get more than the current minimum wage. And given that Work and Income consider a full time earner to be working 30 hours a week or more, any coming off the benefit to work 30 hours a week on the minimum wage will be taking a $3,0000 pay cut to get a job if their benefit is not topped up - and that's allowing for the $60.00 IWTC.

And if it is topped up, the Social Security Act will have to be amended to allow for this guise of work for the dole. If the CPAG wins its case, the Government may have to increase the minimum wage as those on the minimum wage can't go on a benefit to get more money as they working more than 30 hours a week* - although those on the benefit can get a part time job to get more money. If they drop their hours and go on an abated benefit they would still keep their IWTC.
Please check out the earlier post on this over here.
*however the case is not binding so it may well mean the Government ignores any success.




Blogger Steve Withers said...

Rather than increase benefits to singple people wuth no kids, I'd rather see money put into retraining them to do something useful. That's assuming they aren't mentally damaged to the extent they really are useless....and I've seen more than a few of those....

I have no issues with a basic benefit for single people, but I wouldn't want to see them being paid more than any one who is actually working. At the same time, no one on a benefit should be compelled to take any old job. I understand (from experience) that some employers are terrible and working for them isn't work the money...but they aren't all bad.

There should be a register of shitty employers. That would help enormously in maitaining accountability in BOTH directions.

June 3, 2008 at 4:27 PM  

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