You are using an older browser version. Please use a supported version for the best MSN experience.

Youth allowance will go up by the largest amount since 1998 — but it remains stuck below the inflation rate

ABC News (AU) logo ABC News (AU) 5/12/2022
Youth payments will rise for the largest amount since 1998. (ABC News: Jessica Hinchliffe) © Provided by ABC Business Youth payments will rise for the largest amount since 1998. (ABC News: Jessica Hinchliffe)

The chief executive of Victoria's largest social advocacy group wants pandemic-level payments reintroduced to properly address the cost of living after it was announced Centrelink payments for young people would rise by the largest amount since 1998 — but not by enough to cover inflation.

The youth and student payments will rise by 6.1 per cent on January 1, 2023.

According to the Australian Bureau of Statistics, the monthly consumer price index (CPI) indicator increased by 6.9 per cent in the year to October 2022.

Youth Allowance payments will increase between $19.10 and $41.10 a fortnight, while Austudy beneficiaries will see a rise of between $32.20 to $41.40 a fortnight. 

Federal Minister for Social Services Amanda Rishworth says the payment increase is aiming to lessen the burden of rising living costs.

"This will have a significant impact on the hip pockets of young people who are either studying, looking for work or receiving the Disability Support Pension, if they are under 21 and don't have children," Ms Rishworth said.

Anglicare Victoria chief executive Paul McDonald welcomed today's announcement but added for the government to fully address the poverty line and cost of living for families and young people, it only needs to look at the assistance offered during the COVID-19 pandemic.

"What we do know is that during the pandemic, when the base was lifted, and the adjustment was significantly done, then families were empowered to actually deal with, and could pay for, the cost of living," Mr McDonald said.

He added, by increasing the payments through welfare, governments could save money as the demand for relief payments for emergencies, utility bills, tenancy bonds and rental assistance, would decline. 

"We've done the experiment," he said.

"It's whether we are prepared as a community and as a government to revisit the evidence that we saw near on 18 months ago with the pandemic one-off payment, and say, 'Well, if we adjust our pensions closer to that mark, in fact, we'll see less demand on emergency relief, less demand on housing stress and less demand on cost-of-living pressures that families are under."

Regional Victorian mother Jan Gilmour told ABC Ballarat breakfast that it was about time youth allowance was increased but that it wasn't adequate and that was falling on deaf ears in government.

All four of her children have used Youth Allowance and say the amount paid is not adequate.

“We've always ... paid rent, and then the kids have lived off youth allowance. And if they if say that's not enough, they then get a job, as well," Ms Gilmour said.

“But there's a lot of courses out there that are so demanding that kids can't afford the time to get a part-time job.”

She said a lot more needs to be done to encourage young Australians to off to university knowing they’re supported.

Service Australia data shows the federal government spent $12.9 billion providing relief of up to $750 to 2.3 million Australians during the pandemic lockdowns.

The ABC has contacted the federal government for response. 

More from ABC News (AU)

ABC News (AU)
ABC News (AU)
image beaconimage beaconimage beacon