Making a difference to children and families in financial stress and poverty

How prevalent is poverty and financial stress among Australian children and families, and what has been the impact of COVID-19? What difference could social security spending make?

This research brief presents key findings from a study commissioned by BSL and Social Ventures Australia and undertaken at the Centre for Social Research and Methods at the Australian National University.

At a glance

• Inadequate social security payments play a large role in shaping poverty and financial stress trends in Australia.
• By 2017, two-thirds (66%) of children in families whose main source of income was Newstart (now JobSeeker Payment) were living in poverty, up from 25% in 1993.
• Single parent families have much higher rates of poverty than couple families.
• Despite increased unemployment during the COVID-19 pandemic, poverty rates for children of single parents fell from 39% to just 17% as a result of the $550 per fortnight Coronavirus Supplement.
• Modelling shows that increasing overall social security spending by up to 20% would yield strong benefits in reducing poverty and financial stress when targeted towards working age payments, reducing poverty rates for the recipients by up to 75%.

Dive deeper

The ANU study modelled

• Australian trends in poverty, child poverty and financial stress for families relying on income support
• the impact of the COVID-19 pandemic and resulting income support changes on poverty and child poverty rates
• the optimal level of income support required to reduce poverty and financial stress for families and children in the most cost-effective way.

Study report

Detailed findings are available in:

Phillips, B & Narayanan, V 2021, Financial stress and social security settings in Australia , ANU Centre for Social Research and Methods, Australian National University, Canberra.