A quarter who escape poverty are poor again in two years

Almost a quarter of people who lifted themselves out of poverty are poor once again one or two years later, finds a stark study by Brotherhood of St Laurence.

The new study identifies Australians who are more vulnerable to falling into poverty – including older people and the long-term unemployed – and are more likely to remain poor, or churn in and out of poverty.

Among those who experienced poverty, more than 35 per cent of those who escaped it did not become poor again over 11 years, the time period analysed by the study. On the other hand 12 per cent were still poor after the 11 years had passed.Lead researcher Dr Francisco Azpitarte said: "Poverty is relatively short-lived for many Australians who experience it, but for some groups it can be persistent."

In particular older Australians, the long-term unemployed, people with limited education, households where no-one has a job, households where at least one member has a disability – not just individuals with disabilities themselves – and people living in highly disadvantaged areas are more likely to remain poor.

"Even if they are able to leave poverty they are more likely to become poor again, and the longer people remain in poverty, the less likely they are to escape it.

"The Brotherhood's research, 'Persistent Disadvantage', is a chapter in a major new report, "Addressing entrenched disadvantage in Australia", published by the Committee for Economic Development of Australia (CEDA).

Dr Azpitarte and study co-author Dr Eve Bodsworth used data from the longitudinal Household, Income and Labour Dynamics in Australia (HILDA) Survey to use an approach to measuring poverty that traces individuals and households over time. They also measure not only income, but other factors including health, employment status and education. HILDA has been running since 2001, when it began with a sample of 7,862 households containing 19,914 people.

The study says further investigation is needed to understand the factors that enable some households to move out and stay out of poverty. The "poverty churn" for some households points to the need to look at ways not only to assist people out of poverty, but also to safeguard against them returning to it.

"This might require a shift in policy focus towards employment retention and advancement rather than simply emphasising into paid work," the study says. A longer-term perspective looking at employment across the working years may also be necessary — with other research indicating that higher incidences of poverty among older people, especially women, are rooted in their work histories.

"Challenges for policymakers arising out of understanding poverty from a dynamic perspective ... may require a shift in perspective towards understanding individuals in the context of the life span rather than as part of a cohort at a point in time," the study says.

Read the Addressing entrenched disadvantage in Australia report here.

MEDIA CONTACT: Jeannie Zakharov (03) 9483 2463 , 0428 391 117 or jzakharov@bsl.org.au