BEYOND the politics and numbers, people living on Newstart have told the ABC about their daily struggles to get by on a basic income.
Some have gone without food, isolated themselves from friends and family out of shame or been unable to afford basic health care.
Our economy has been run into the ground …
But if NewStart were to be increased it would mean more $$ circulating at the shopping centres … a boost to retailers and NewStart recipients alike!
‘It’s a struggle to get by’: Four people share what it’s like on Newstart
By business reporter Emily Stewart
22 AUGUST 2019
Do you think you could live on $40 a day? What about $70?
More than 720,000 people are on Newstart, which is the main unemployment payment in Australia.
It’s available to people between 22 years of age and the pension age — as long as they are looking for work, meet an income and assets test, and are an Australia resident.
But beyond the politics and numbers, people living on Newstart have told the ABC about their daily struggles to get by on a basic income.
Some have gone without food, isolated themselves from friends and family out of shame or been unable to afford basic health care.
As part of ABC’s personal finance project we have spoken to four recipients of Newstart about what life’s really like and where their money goes.
Peter, 55: ‘I have to make very hard choices’
Peter has been on Newstart for about a year and a half.
“I have to make very hard choices. If I get sick, I have to suck it up. I can’t afford medicines. I put off things like haircuts as far as I possibly can,” he said.
“In the last couple of weeks I’ve got a leaking tap in the shower that I can’t afford to repair.
“I’ve turned the water off and I’m showering every two or three days because the water flows and I can’t afford to pay a plumber for basic household maintenance.”
Life changed for Peter 13 years ago when he was hit by a car while walking across a pedestrian crossing.
He rolled up the bonnet and into the windshield, injuring his back and spine.
Several years earlier, he had taken a redundancy after working in banking and finance for two decades.
“At that stage my intention was to travel and work casually and go back to the financial industry,” Peter said.
But the accident left him with injuries which meant he couldn’t sit for long periods.
Instead, he spent a decade working in retail, until March last year when he began on Newstart.
“Now I struggle to handle a retail job — you’re on your feet all day,” Peter said.
“Bending down might sound a fairly simple task, but to pull down and put merchandise in a bag is tricky because I have weight limitations.
“I’m now no good at bending or a lot of physical work — that’s the difficulty I face. I’m not on Newstart because I chose to be, I’m not a young dole bludger, I have had a go.”
He says it’s almost impossible to live on the $433.50 a week he receives in total from Newstart and his income insurance, even though he lives alone with no children.
‘I’m spending every cent I’m earning’
Peter doesn’t receive rental assistance because he owns a flat in suburban Melbourne that he bought 20 years ago.
Shortly after the accident, he took out a second mortgage and now he can’t afford the repayments on the two loans.
Instead, he’s only paying interest on a smaller $55,000 loan, but nothing towards a $128,000 larger debt.
“I have been unable to pay the mortgage so now I’m in arrears. I can’t pay the mortgage on that,” Peter said.Are almost all Newstart recipients receiving other benefits?
Treasurer Josh Frydenberg says over 90 per cent of Newstart recipients receive other benefits. But does that stack up? RMIT ABC Fact Check has run the numbers.
He says by accessing hardship provision at the bank, one lender has given him a break from payments for about a year, but time is almost up.
The other lender did not give him any delayed payments, and the interest is adding up.
“Basically I’m spending every cent I’m earning. I’m still behind. The bank wants to foreclose.”
Peter is working with a disability services employment provider and has to apply for five jobs a month.
He says his self-esteem has suffered, and he suffers from anxiety and depression.
“I’m socially isolated. People take a lot of things for granted — if you catch up with friends and go out for coffee that’s an expense,” Peter said.
“If you get invited to go out for dinner, it’s an expense. I’m saying no to social invitations. That adds to my sense of isolation and depression as well.”
His nutrition is also suffering.
“The first week of each fortnight I eat okay — I buy fruit and veg and the second week I cook eggs, fried eggs, poached eggs, scrambled eggs — because it’s cheaper.”
Peter says frustratingly, he has a significant sum of $450,000 in super that he’s unable to access.
He has tapped into his super under financial hardship provisions, but that’s restricted to $10,000 (and is taxed at between 22-32 per cent).
If you or anyone you know needs help:
- Lifeline on 13 11 14
- Suicide Call Back Service on 1300 659 467
- MensLine Australia on 1300 789 978
- Beyond Blue on 1300 22 46 36
“I’m constantly borrowing from family and paying them back,” he said.
“I had a meltdown last week and sent an email to one of the banks and I had two police turn up Friday night doing a welfare check. They were concerned I’d take my life.”
He is counting down the four years until he is able to access his super.
“I sometimes wonder how I will manage until then. It’s very hard,” he said.
“I’m thinking I might end up having to move home with my father [in country Victoria].
“I’m not really keen on doing that. I don’t know what will happen — that causes an additional amount of stress.”
Bev, 49: ‘Everything is completely bare bones’
Bev went on to Newstart seven years ago, after her relationship broke down.
She and her ex had been together for 11 years and bought a unit.
When they split up she received about $30,000, paid in small amounts. It was used for living expenses.
“I was a stay-at-home mum and I’d started a university degree and I went through a severe patch of depression after the break-up as well,” she said.
Surviving just on Newstart has been tough.
“It’s really extremely difficult. There’s really no extra money, you don’t get to have savings.
“There’s no backup money in case of emergencies, so you’re always worried that something’s going to go wrong.
“You think if all of a sudden, you have an unexpected expense, then it’s incredibly stressful — it’s really just week-by-week living.”
She has lived in a boarding house in inner Sydney for the past year. A small room, an ensuite with a kitchenette costs her $300 a week.
Her son, who is now 18, lives with her half of the time.
It’s relatively expensive, but she wants to be near her son’s school and her community.
“I wouldn’t feel comfortable if I was too far away [and] he would feel that as well,” she said.
“This is where my connections are and where it feels like my community.”
She bought a loft bed (similar to a bunk bed with no lower bed) and they sleep in the same room.
“We had one tenant a little while back that would fly into a rage and caused quite a lot of disruption and he was evicted,” she said.
“Most of the tenants are very quiet and keep to themselves. Some are friendly and have a bit of a chat, so really the atmosphere is pretty good.”
But trying to look after a hungry teenage boy on Newstart has been tricky and she has used foodbanks.
“I spend the absolute minimum for food on the week by myself because I need most of the food budget money for the week I have for my son. Teenage boy equals a huge appetite,” she said.
She says her son hates her spending money on him, which makes her feel upset and guilty.
“If I try and give him some money in case he wants to buy some food at school or that he has some money if there’s an emergency, he doesn’t want to take it,” she said.
“I just hate that he feels the pressure and guilt about costing me when that’s my child and it’s my role to look after him.”
She says her ex-partner pays for all the extra costs for their son, like books, uniforms and excursions, as she can’t afford it.
“I don’t take on any extra expenses, everything is completely bare bones. I make sure I pay my rent, I make sure I’m covered for my electricity and my phone and then it’s just groceries,” she said.
She takes public transport as she doesn’t have the money for a car, or the petrol and maintenance that goes with it.
‘It’s hard to stay strong’
After a tough few years, Bev is still hopeful of things improving.
Before she had her son, she had worked in retail, hospitality and in office work. Now she’s hoping to get into community services or child protection.
But it’s hard to compete with large numbers of applicants, and a requirement for experience in the area, which Bev doesn’t have yet.
“So I’m looking at starting at a pretty low level so I can work my way up,” she said.
“I would have to say my confidence levels are really low and even the prospect of when I get a job I feel stressed at this point about my abilities to cope with it.
“You’re trying to live your life, you’re trying to get by, you’re trying to do the best you can, especially for your child, and manage everything and a household.
“That’s all stressful enough and you’re fairly divided from participating in society because you just can’t afford to go out and do much because everything costs money.
“It does have an impact on you, you do just start to feel pretty low. It’s hard to stay strong.”
Retirement is looking pretty grim as she has not contributed to her super account for many years.
“I’m aware that retirement stage is not going to be good. Once I get back to work then super is going to have to be a bit of a priority,” she said.
But for now she’s concentrating on daily survival.
She hasn’t been to the dentist for years, but has work that needs to be done. She does her hair at home and misses most social gatherings.
If she does treat herself, it’s something from the op shop.
“Every so often I shop at Vinnies, so if you get to find a nice item of clothing you really like that can be a bit of a splurge,” she said.
“Or I might just buy myself a little sweet treat when I’m shopping or something like that.”
Greta*, 55: ‘I’m highly competent, I’m a hard worker, I have a brain’
Greta has been on Newstart for about four years.
“I never imagined I would be in this position. I went back to uni and did my master’s degree thinking I’d update my skills,” she said.
But she was unable to find work in the area she had worked for several decades — media and communications.
Since being on Newstart she’s applied for hundreds of jobs in industries ranging from professional roles, retail work to domestic services.
“I’ve even tried to dumb down my resume. I say, ‘I’m looking for a change of pace — whether it’s the top end or bottom end — none of it’s made a difference,” she said.
“I’ve rewritten my resume a thousand times, paid for it to be done professionally.”
She thinks her age has made it harder to find work. About a quarter of all Newstart recipients are over 55 years old.
“I’m highly competent, I’m a hard worker, I have a brain. You can’t seem to get past that wall,” she said.
“I’ve got no-one, no parents, no partner. I’ve had to fall back on government help and I am grateful for that, but it doesn’t take away the despair.”
She can no longer afford to rent her one-bedroom flat, and for the past year and a half has been housesitting or boarding in private houses.
She has moved house seven times in that period and currently isn’t paying enough rent to access rental assistance.
Her belongings are in storage, which is one of her biggest expenses.
“I don’t drink, I don’t smoke, I’m a vegetarian so I don’t eat meat. Even with all that, it’s still a struggle. To buy cheese is a luxury,” said Greta.
“I have found hunger one of the most difficult things to deal with.
“So in the past few months on a couple of occasions after I’ve paid all my bills, I’ve found I had $1 in my account to last the rest of the week.”
‘You’re made to feel you’re a scourge on society’
She has to rely on her credit card for unexpected expenses, like a recent $800 dental bill.
“In the last couple of months I’ve had to use my credit card,” she said.
“But I also had stuff on my credit card from previously, so it’s got to the point where I’m in the same position where I have to apply for my super to pay off the credit card.”
To pay off her credit card debts, she has accessed some of her super through hardship provisions — but she’s got hardly any money left in her account.
It’s meant Greta’s worried about her future security.
She’s too embarrassed to confide in family and friends about how bad her financial situation is.
“They don’t know about my situation — it’s too embarrassing. I’ve looked after myself all my life, so this is really difficult,” she said.
You might also like:
- New Zealand parliamentary speaker cradles and feeds MP’s baby during debate
- Is Book Week one of the biggest lies we’ve ever told our children?
The one luxury she allows herself is a bought cup of coffee once a week, just to have some social time.
“When you hear the talk and the labelling that goes it, it really affects you,” Greta said.
“You’re made to feel you’re a scourge on society and one of the things people tend to forget when they make those statements, [is] some of these things are circumstances outside of my control.”
Tom, 28: ‘I’m not a lost cause or hopeless’
Tom has been on Newstart for six years, since he was 22 years old.
But he’s been doing a variety of casual jobs in that time — including hospitality, audio engineering and getting paid work as a musician.
“It depends on basically luck of where you land in this sort of area of the labour market,” he said.
People receiving Newstart can earn about $104 a fortnight before their payments are reduced.
“I’ve had jobs that are very good to me, I’ve had shitty survival jobs,” he said.
“The only real consistency is the inconsistency of which you can find work and maintain it.”
Tom also volunteers essentially full-time at the Unemployed Workers Union.
“I’m not a lost cause or a hopeless case because I’ve been on Newstart,” he said.
“And I’ve actually been surviving, and when able, it’s been difficult, but trying to thrive a bit.”
He says his physical and mental health has deteriorated during the past six years.
“Malnutrition is unavoidable and crazy, particularly when you have multiple medications, treating my mental illness, for that to affect your eating as well,” Tom said.
“There’s dense layers of concern that all fold into each other – right at the top of it is Centrelink and the job network radiating the bad days in your direction.”
‘The psychological legacy of living on Newstart’
He lives in a share house in Sydney with three others and they pool their money for groceries, which enables them to eat well.
“We don’t have to skimp, we can buy quality produce and fresh meat and all this stuff and we can eat healthily,” he said.
But it took a while to find the right set-up and Tom feels lucky they can share costs.
However, his housemates have also experienced insecure work.
“Just in my house in particular, two have lost their jobs recently, in the past month,” he said.
“One has just got a new one, one is working on getting a new one and the other one works I think part-time as a retail worker.
“None of us feel like we’re getting ahead.”
Tom hopes that he can find full-time work either in advocacy or music.
“I’ve been able to construct a sort of career for myself, which has an upward trajectory,” he said.
“Music is less certain obviously but that’s still my thing — I’ve been playing guitar and other instruments for 10 years, writing and recording music for half that long — that’s my job.
“I go around and perform in public for money — that may not lead to me being rich and famous, but that’s a job.”
He’s only just started earning money in super for his eventual retirement.
“Now I’m developing some super from the small amount of work I do at the age of 28 — pretty much everyone else I know is in a similar situation,” he said.
When unexpected expenses come up, Tom has had to default on the debt or try and get an advance on Centrelink (which you’re allowed once per year).
“Personally I will not use a credit card in this situation, I very well understand the dangers and the fact I won’t be able to pay that off,” he said.
“Unfortunately a lot of people in that situation do rely on credit cards — that just adds to their poverty trap adding more costs and more debt.”
The last flat he was renting had a flaw in the meter and he was charged hundreds of dollars for each bill.
“There’s no way I could ever pay that so I had to engage in this running sort of deflection from the utility company and they did cut me off at one point, which led to a pretty horrible weekend for me in winter,” he said.
“The fact remains I have roughly $30 a week left over that isn’t dedicated to survival purposes exclusively.
“So when unexpected costs happen, that shred of autonomy goes. And they happen a lot.”
Are you a young woman who needs help to manage your money?
We know you have unique challenges as overall, research has shown that young women:
- Earn less than men
- Have less superannuation
- Are more likely to have career breaks
- Have lower levels of financial literacy
It’s time to change things. We want to help you to become more confident about money and have the skills and information you need to shore up your financial future.
So let’s do it together.
Send in your questions about money using the form below and we’ll try to get our journalists to find you an answer.
0/140We’ll be in touch if your question is chosen to be answered.
Yes, please sign me up for ABC NewsMail
Yes, please sign me up for the ABC Life newsletterSubmit
Your information is handled in accordance with this Privacy Statement.