Sole parents: participation and equality Workshop on Gender Equality in Australia s Tax and Transfer System, 4-5 November 2015 Peter Whiteford, Crawford School of Public Policy peter.whiteford@anu.edu.au
Outline Policy issues Lone parents, family and employment trends Trends in the economic well-being of lone parents Conclusions
Policy issues The shift towards activation: family joblessness and child poverty a benefit strategy or a work strategy or both? Does work work? How much better-off does work make lone parents? Combining work and family life how difficult is it for the low-paid? Holes in the safety net?
Poverty rates are strongly influenced by employment status % of households with incomes less than 50% of median income, 2007-08 80 70 67.8 60 50 50.8 40 30 20 10 0 Lone parent not employed 14.9 Lone parent employed part-time 1.2 Lone parent, employed fulltime Couple, neither employed 7.9 Couple, one employed 2.9 Couple, two employed, one FT 0.6 Couple, two employed, both FT 4
5 Most poor children in Australia live in jobless households Jobless households as percentage of all poor (<50% median income) households with children, 2010 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%
Policy developments 1942 Introduction of Class A Widows Pension. 1968 States Grants Deserted Wives Act assisted deserted wives in first 6 months after desertion or birth. 1973 - Introduction of Supporting Mother s Benefit providing assistance after six month waiting period. 1975 Introduction of no fault divorce. 1977 Introduction of Supporting Parent s Benefit covering fathers. 1980 Six month waiting period for SPB abolished. 1989 - Sole Parent Pension replaced Class A Widows Pension and SPB. 1998 Parenting Payment Single (PPS) replaced SPP. 2006 - Child eligibility age lowered from 16 to 8 years for new applicants for social security payments, with new applicants having participation requirements and claiming Newstart (lower payment for unemployed). 2009 Change in indexation of family payments from wages to prices. 2011 Amendment to grandfathering to restrict impact of new birth. 2013 Remaining grandfathered recipients moved to Newstart.
Trends in lone parenthood, employment and welfare receipt
Lone parents as % of families with children under 15 years of age, 1974 to 2012
Employment to population rate (%) among lone parent families, 1980 to 2012
Despite recent increases, employment of lone parents is relatively low Employment to population ratio, lone parent families, 2001 and 2011
Number (000s) of lone parents receiving Parenting Payment Single (or Newstart), 1965 to 2014
Trends in principal source of income for lone parents, Australia, 1994-95 to 2013-14 Wages and salaries Government pensions and allowances 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0
Trends in contribution of welfare payments to lone parents income (%), Australia 1994-95 to 2013-14 % of lone parents by group 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 50% to less than 90% 90% and over
Conclusions Lone parents have enjoyed significant real increases in income since the 1990s Employment increases have been significant and reliance on social security has reduced Lone parents have moved from the lowest income quintile to the second lowest Income inequality among lone parent families has increased, and relative poverty rates have been stable Housing costs may have increased as lone parents are now more likely to be private renters Much of the improvement in the economic circumstances of lone parents appears to have started before policy changes. Some of the changes appear to reflect changes in demographic composition of the lone parent population. More research required on identifying losers from policy changes.
Additional Material
1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 As a result of policy changes, benefits for families have increased significantly in different periods Value of assistance for one child family, 2010 $ pw, 1975 to 2010 Family allowances Additional family payment FTBB Total 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Number of jobless families with children under 15 ('000) Joblessness among families with children has been falling, but remains high 300 250 200 150 100 50 0 Jobless couples Jobless lone parents 17
Trends in joblessness among parents, 1982 to 2009-10 18
The employment gap Difference between the employment rate of lone and partnered mothers, OECD countries, 2011
Lone parents distribution by income quintile, 1994-95 to 2011-12
Median net worth ($), couples and lone parents with dependent children only, 2011-12
Trends in median net worth by household type, 2002 to 2010
Poverty rates among lone parent and couple families with children, 2000-01 to 2011-12
Trends in housing tenure, lone parents, Australia, 2000-01 to 2011-12
Composition of benefit packages, $ per year, 2015
Lone parents on income support as % of working age population, 1974 to 2014
Slovenia Japan Luxembourg Greece Cyprus2,3 Finland Spain Sweden Portugal Italy Austria Denmark Estonia Netherlands Lithuania United States Latvia Czech Republic France Poland Malta Germany Romania Slovak Republic Belgium Bulgaria Hungary Australia Turkey New Zealand United Kingdom OECD Average 27 Per cent of children living in jobless families, 2009-10 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0
Change in employment to population ratio for lone parents 1980 to 2012 % point change on previous year
Employment to population rate (%) among lone parent families by age of youngest child, 1981 to 2009
Trends in incomes of lone parents relative to community incomes, Australia, per cent change in real group income, 2000-01 to 2011-12
Trends in income inequality among lone parent families, 2000-01 to 2011-12 Gini coefficient for equivalised household disposable income
Distribution (%) of lone parent households by age, 2000-01 and 2011-12
Lone parents as % of all households with children by age of household head, 2000-01 and 2011-12
Benefit entitlements for lone parents with two children as % of median equivalised income, 2005-2013
Change in benefit entitlements for lone parents as % of median equivalised income, 2005-2013
Who are the most disadvantaged? Per cent of group experiencing deep and persistent disadvantage, 2001 to 2010 36