Has mutual obligation made life harder for the unemployed? Evidence from two social surveys
Peter Saunders and Yuvisthi Naidoo
Social Policy Research Centre, UNSW
Contact Email:   ynaidoounsw.edu.au

Despite sustained economic growth and declining unemployment, the numbers of working-age Australians in receipt of a social security benefit continues to rise, particularly the numbers on disability benefit. But the last six years has seen a marked shift in the tightening of eligibility for benefit under the banner of mutual obligation, which first affected those on unemployment benefit and, from July 2006, those on disability support pension and lone mothers. Although these policy shifts are intended to shift people from welfare into work, their immediate impact has been to make life harder for those forced to comply with new regulations and face the prospect of having their benefits withdrawn if they fail to take what policy makers deem to be appropriate steps to look for work.

This paper begins by providing a brief overview of welfare to work policy reforms in Australia, focusing on the impact of policy on the numbers on unemployment benefit and on the attitudes and experiences of those who have had their payment withdrawn temporarily (or been 'breached'). This is followed by an examination using data from the official Household Expenditure Survey of recent trends in financial stress among social security recipients to establish whether there has been a break in the relationship between financial stress and other key variables. It then analyses data from two social surveys that collected information on a variety of indicators of subjective well-being to assess how low-income and social security receipt affect life satisfaction and happiness. The surveys were conducted in 1999 and 2006 and cover around 2,400 and 2,700 adult Australians, respectively, and much of the information in each is directly comparable. The analysis will focus on establishing whether dependence on social security benefits contributes to subjective well-being independently of other factors such as income, age, health status, susceptibility to deprivation and poverty, experience of adverse events and family circumstances. Comparisons of the results from the two surveys will also provide an insight into whether and how recent changes to social security eligibility associated with welfare to work reforms have affected the living standards of social security recipients.

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