Australia's $100 billion welfare system would be stripped back to four basic payments under a blueprint that would increase work requirements for hundreds of thousands of people.
An interim report by former Mission Australia chief Patrick McClure recommends dumping the 20 existing payments and 55 supplements with four "pillars": a working-age payment, Disability Support Pension, Age Pension and child payment.
He proposes reserving the DSP for those with permanent impairment and no capacity to work, meaning many of the 830,000 recipients face being forced on to a lower working-age payment.
This would be tiered to account for ability to work, including parental and caring responsibilities, with higher payments recommended for single parents, the disabled and others with significant barriers to work.
Welfare groups and the Opposition said the report should not be used as cover for another round of cuts targeting the vulnerable.
The child payment would replace Family Tax Benefit Part A, Youth Allowance, ABSTUDY and payments for dependent children.
Social Services Minister Kevin Andrews said the McClure proposals were aimed at future-proofing the welfare system in the shadow of an ageing population and a contraction of the workforce supporting them.
Mr Andrews said the community will have six weeks to respond to the report before final recommendations are taken to the Government.
Mr McClure said the welfare system was complex and inefficient and had not kept up with the changing labour market that more part-time jobs, higher skilled work and more women in the workforce.
“The current system has disincentives to work as a result of tax and taper rates, and early intervention is needed particularly for young people and teenage parents,” Mr McClure said.
“Labor supports measures to help people on the Disability Support Pension back into work where it’s possible and appropriate,” shadow treasurer Chris Bowen said.
“That’s what we did in office with quite positive and remarkable results. What we don’t support is cutting people’s benefits on disability support in some brutal and blunt effort to force them back into inappropriate jobs. We won’t support that.”
Business Council of Australia chief executive Jennifer Westacott said that while the welfare system had to take sensitive account of people with obligations, such as carers of people with a disability, the frail, aged or young children, the system had to reflect the reality that people needed to change jobs and re-skill over their working life.
“Strengthening the capacity of individuals and families to improve their own circumstances must be a cornerstone of the welfare system, and we welcome the report’s focus on this,” she said.