Working Credit – Reward for people who work
Minister for Family and Community Services, Amanda Vanstone, today announced Government funding of $506 million to introduce a Working Credit that would encourage more people to take up work.
“At the moment, people who have been out of work for some time and then find a job are disadvantaged by social security income test rules,” said Senator Vanstone.
“As soon as a person on income support starts earning money above the income test free area (currently $62 a fortnight for singles), their unemployment payments start to reduce straight away.
“The result is that a person who takes a full-time casual job can be worse off than someone who earns small, regular amounts of money.
“Under the new arrangements, people who earn income of up to $48 in a fortnight will be able to accumulate up to $1000 in their Working Credit at the rate of up to $48 per fortnight. Then when a person gets a job, their income support payments will only start to reduce once their earnings have reached the amount they’ve built up in their Working Credit.
Senator Vanstone said the Working Credit would be available to all people of working age who receive income support payments.
“This simply means that when someone has built up a Working Credit and gets work they will get to keep more of their payment because the credit is used to offset their earnings.
“This is a major step forward in dismantling the welfare trap.
“This Government is about encouraging people to work. One of the best ways to get back into the full-time workforce is by getting your foot in the door through some casual work.
“The current income test rules only reward or encourage people who have low earnings from limited casual work or part time work. The new Working Credit will also reward people who get the chance at more extensive part-time or full-time work. The Working Credit will help with the costs of taking up work, by allowing people to keep some of their payment when they start.”
Senator Vanstone said that the rules would also be changed to make it far easier for people who have short term, full-time work to get back onto income support if they lose their job within 12 weeks.
“This change will also encourage more people to accept job offers – the current processes often deter people from taking on short term work, because they feel it is too hard to get their payments back after finishing work,” Senator Vanstone said.
“For too long people who are trying their best to get back to work have faced unwanted and unnecessary obstacles – we are doing something about it.
“The Working Credit is an excellent example of the positive approach the Howard Government is taking towards helping Australians return to work and is just reward for people trying to help themselves.”