Media Release by Senator the Hon Kay Patterson

More rewards for people who move from welfare to work

About 60,000 people every fortnight have more money in their pockets – more than $500 in some cases – because they are able to keep more of their Centrelink income support payments when they start work under a new scheme to help people move from welfare to work.

The Minister for Family and Community Services, Senator Kay Patterson, said that since the introduction of Working Credit in September 2003 more than one million people have already built up as many as 530 credits.

She said for each working credit a person has they can earn one dollar more before their Centrelink payment is reduced. For example, a single unemployed person has an income free area of $62 and with 530 working credits they can earn $592 next fortnight and still keep all of their Newstart Allowance of $385 – a total of $977 for the fortnight.

Similarly, a person with 530 working credits could take a short-term, part-time job earning $168 a fortnight for 10 weeks before they would lose any income support payments.

Senator Patterson said: “This could be an important stepping stone towards more permanent or full-time work.

“We are rewarding people who are willing to take that first step back into paid work by providing financial assistance to ease the transition from welfare to work.

Working Credit lets people build up credits – up to a maximum of 1000 – when their income is low and use those credits to reduce the impact of earnings on their Centrelink payment when they start work.

“Over the coming months, Centrelink will be reminding people with high Working Credit balances how Working Credit can help them when they take up work.

“The Australian Government is committed to helping people increase their participation in the workforce by providing more incentives to work and reducing disincentives from moving from benefits to paid employment.”

Senator Patterson said Working Credit also helps parents to return to work after caring for a child.

“For example, a parent with two children and 500 working credits earning $162 a fortnight will keep their full rate of Parenting Payment for 10 weeks. This means they can work for a few hours while the children are at school and it could be a valuable first step towards permanent or full-time work,” she said.

“If a recipient is receiving a pension or parenting payment and their earnings reduce their fortnightly Centrelink payment to zero, they can keep their concession card for up to three months.

“Also, if the job ends or the person’s earnings fall within that three months, they only need to advise Centrelink to have their payment resumed instead of having to reapply.

“If eligible, Centrelink customers may also be able to keep the maximum rate of Family Tax Benefit (A) and the maximum percentage of Child Care Benefit during these three months.”

Working Credit is available automatically to all eligible Centrelink customers – there is no need to apply or fill in forms.