Peak body wants welfare payments simplified on UK model

THE many income support payments in Australia's welfare system should be overhauled and remodelled on the United Kingdom's single working age pension, the nation's peak social services group has urged.

Replacing the myriad Australian welfare payments, the system should instead have a single payment with extra "supplements" for those that may be raising children, caring for a child or have a disability.

The submission from the Australian Council of Social Services to the Abbott government's welfare review also urged the government to drop its controversial reforms to income support.

It proposed creating a new "independent commission" of experts to review and develop the benchmark rates for a new single working age welfare payment, similar in role to the Fair Work Commission.

But the government's budget changes, including the proposal to cut young people's unemployment payments for six months, changes to the Family Tax benefit B and indexation of pension to inflation, should be abandoned, the council says.

ACOSS chief executive Dr Cassandra Goldie said the welfare system was already broken and "tinkering at the margins won't fix it".

"People with the same financial needs receive vastly different payments and those on the lowest payments such as Newstart Allowance receive as little as $35 a day," she said.

"A carer, person with disability or sole parent who moves to the lower Newstart Allowance loses up to $170 a week in income for no valid reason.

Dr Goldie said it was counterproductive for people to have to prove they could not work a practice about to be expanded by the government. She said many people were being "written off" in the jobs market.

"Payment levels should be based on people's financial needs now, not their future employment prospects," she said.

These payments should be moderated by a commission, Dr Goldie said, which would help ensure payments were based on an "objective assessment"; "not the opinions of decision-makers that some groups 'deserve' more or less than others".

The review, led by former Mission Australia chief Patrick McClure is expected to report to Social Services Minister Kevin Andrews later this year.