Advertisement

Low-income families 'worse off from cuts'

Some low-income families will be up to $6165 a year worse off under the combined effect of welfare and childcare changes in the Abbott Government's first two Budgets, according to an analysis.

The National Centre for Social and Economic Modelling has found that nine out of 10 of the lowest-income families will have their disposable income cut under the changes. By comparison, some well-off families will be slightly ahead.

The biggest losers will be sole parents and single- income families with school-age children.

NATSEM's analysis, commissioned by the Federal Opposition, shows sole parents earning $55,000 with two school-age children will be $3715 worse off in 2015-16, growing to $6108 by 2018-19.

Single-income couples with two school-age children will be $3734 worse off in 2015-16, growing to $6165 by 2018-19.

NATSEM calculated the combined effect of various freezes and indexation changes to Family Tax Benefit payments in last year's Budget and the $3.5 billion childcare package.

The limiting of FTB Part B to parents with children under six - a change that will have trouble getting through the Senate - saves $15.5 billion in its first nine years.

NATSEM split families into five quintiles to analyse the effect of the welfare and childcare changes and found that the first quintile, which earns up to $47,000, would be 7.1 per cent worse off by 2018-19, compared with families on incomes of more than $119,000, who would be 0.2 per cent better off.

Labor leader Bill Shorten said the NATSEM study had uncovered the "hidden hit" on Australian families.

"The closer you look, the worse this Budget gets," Mr Shorten said. "It's proof that Tony Abbott's promise not to hurt families was only ever a lie to save his own job."

The Prime Minister yesterday confirmed the Government would appoint a senior police officer to oversee a crackdown on welfare fraud, _hoping to claw back $1 billion. _

Mr Abbott said it was important to make sure the welfare system was fair and that recipients were "playing by the rules".

"We think that up to a billion dollars a year in our $150 billion social security system can be defrauded because people are not being up-front about their income, so it's important that we ensure that people are being straight with us," he said.

Last year, the Government tightened access to the disability pension, with applicants asked to see a Government-appointed doctor to assess their eligibility.

"No one would be able to go on the disability support pension simply on the say-so of their own doctor," Mr Abbott said.