The Federal Government's proposed cuts to Newstart would hurt 160 recipients on Kangaroo Island, according to Labor Senator for SA, Marielle Smith.
The proposed cuts were set to be debated in the House of Representatives on Monday, December 2, according to Ms Smith.
"The Morrison Government proposes to cut Newstart by increasing the liquid assets wait period from three months to six months," she said.
"The cuts will disproportionately impact middle-aged and older workers who are made redundant, especially those in rural and regional South Australia."
Currently, there are 19,633 Newstart recipients in regional South Australia, 4,332 in the electorate of Mayo and 160 in the Local Government Area (LGA) of Kangaroo Island.
Member for Mayo, Rebekha Sharkie said Centre Alliance was opposed to the doubling of the liquid assets waiting period as it believed Australians should not be penalised for having personal savings if they become unemployed.
"The Government's proposed policy would create a perverse incentive for people to quickly spend their savings or otherwise distort the allocation of their personal funds to different asset classes in order to fast-track a Centrelink claim," Ms Sharkie said.
"As a party, we instead welcome and encourage Australians to continue to take individual responsibility for their financial futures, noting that the normal income and asset tests for Newstart, Youth Allowance, Sick Allowance and Austudy will still remain in place regardless of this proposal."
According to the Labor party, the Morrison Government wants to extend the Liquid Assets Wait Time from three months (13 weeks) to up to six months (26 weeks).
"For many, this will eat up the only financial buffer standing between them and hardship - what are they going to do if their car breaks down; their whitegoods need replacing; or if family members become ill.
"If you're a single, with $18,000 in liquid assets - the Government wants you to wait six months before you can access income support - $36,000 for couples.
"Most Australians know that $18,000 isn't a lot of money - especially when you need to stretch that out over six months.
But it's not just cash in hand. Liquid Assets can include:
- shares and debentures, term deposits;
- some payments made or due to be made by a person's last employer - including redundancies yet to be made;
- 10 year insurance bonds;
- amounts deposited or lent to banks or other financial institutions - whether or not the amount can be withdrawn or repaid immediately;
- assets given to a son or daughter in some circumstances;
- loans to other people;
- monies in trust funds, bank accounts including mortgage offset accounts, BUT NOT balances of mortgage redraw accounts, and
- compensation payments.
According to the Labor party, Australians aged 45 and over make up half of all Newstart recipients.
"Middle-aged and older Australians have the most difficulty re-entering the workforce because of structural barriers and age discrimination. We know this is especially true for rural and regional South Australia.
"Senate Estimates has revealed that this proposed waiting period will impact 10,000 Australian workers each year for the next four years - that's 40,000 Australian workers.
"Based on those figures this will impact 10,000 Australian workers over the age of 55 over the next four years - or20,000 Australian workers over 45 years old."