The Federal Government is reforming the way it manages Urgent Payments to break the cycle of debt and better support welfare recipients who find themselves under financial stress.
Urgent Payments are not additional payments. They bring forward part of a person’s regular welfare payment to meet an urgent expense, leaving less for regular expenses on the normal payment date.
Of the 81,000 people who requested more than one Urgent Payment in a year, almost two-thirds made the subsequent request within 30 days of the first.
This includes 38,000 people who requested a second Urgent Payment within 15 days of a previous request, and this happened 83,000 times, indicating the payments may actually be exacerbating the cycle of running short of money.
Most Urgent Payments were requested by people aged 30–34 years. 90 per cent of Urgent Payment claimants are single and more than half (54 per cent) are male.
In addition, analysis of aggressive incidents at service centres shows a link between requests for Urgent Payments and antisocial behaviour which may be a danger to other recipients and staff.
Twenty-one per cent of these aggression incidents are linked to Urgent Payments.
To address these issues, from 1 June 2017 the Federal Government will:
- Streamline the application for Urgent Payments, making it much faster and easier to access up to two Urgent Payments per year
- Cap the number of times a person can receive an Urgent Payment, in most cases, at two per year
- For people who request more than two Urgent Payments, facilitate their entry onto weekly rather than fortnightly payments, and set up Centrepay deductions to help them reduce financial stress and better manage their bills and expenses.
Social workers will also provide additional support and make referrals to other community organisations, accommodation assistance or financial counselling, where necessary.
Advance payments and crisis payments will also continue, to ensure those most in need don’t go without.
The new model aims to identify people experiencing ongoing financial difficulties and offer early intervention and help.
The reforms will help break the cycle of debt and help recipients improve their long-term financial literacy – benefiting both recipients and department staff.