Activation and Welfare Dependency

The Welfare to Work (WtW) reforms of 2006 introduced new measures and tightened eligibility requirements for various groups of Income Support (IS) recipients, including some principal carer parents, with the aim of increasing workforce participation and reducing welfare dependence amongst these groups. From 1st July 2006, low income single parents applying for benefits with a youngest child aged eight years or older, and low income partnered parents applying for benefits with a youngest child aged six years or older, were only entitled to Newstart Allowance (NSA) – less generous with tighter participation requirements – rather than Parenting Payment Single (PPS) or Parenting Payment Partnered (PPP) as had previously been the case.

This group of new claimants, however, only represented a small minority (around five percent) of all principal carer parents (Department of Education, Employment and Workforce Relations, 2008). The vast majority of principal carer parents – those already in receipt of PPS or PPP at 30 June 2006 – were given a temporary exemption from the new eligibility requirements in order to avoid too abrupt a change to the system. These 'grandfathered' PPP/PPS recipients continued under the old system, without additional participation requirements, until at least one year later (from 1st July 2007). After 1st July 2007, with changes phased in over the following year, parents from this grandfathered group with a youngest child aged seven years and over were required to meet new parttime participation requirements, although they continued to receive PPP/PPS until their youngest child turned sixteen, as long as they remained eligible.

This project assesses the effects of this phased activation of grandfathered principal carers after 1st July 2007.