Changes to Parenting Payment (Single)

This month we would like to address a topic that will impact single parents and primary carers of children: the changes to Parenting Payment (Single) (‘PPS’).

Following the 2023 federal budget, the eligibility for PPS will be extended. From 20 September 2023, single parents can remain eligible for PPS until their youngest qualifying child turns 14.

Under the existing legislation, a single parent who is the principal carer of a child is eligible for PPS until their youngest child turns eight. After that date, those seeking continued income support are transitioned to JobSeeker Payment, which is approximately $204 less per fortnight than PPS.

Many of our clients reported that this drop in income caused them financial stress and made it challenging to balance work and family responsibilities. This change will increase the maximum basic rate of payment for eligible parents, from $745.20 per fortnight on Jobseeker Payment to $922.10 per fortnight on PPS.

These reforms were introduced as a measure to reduce rates of child poverty and help assist single parents and primary carers with the costs of raising children. The Department of Services Australia expects that the reforms and increased financial support to PPS will benefit approximately 57,000 people, 52,000 of whom are women.

Further, after significant advocacy by organisations including the National Council of Single Mothers and their Children, the federal budget also resulted in the abolishment of ParentsNext; a compulsory program for recipients of PPS to remain eligible for the payment. SSRV regularly spoke to single parents at our legal service who had found the ParentsNext program to be punitive, invasive and stressful.

From 5 May 2023, compulsory participation in ParentsNext has been paused and the Government has announced its intention to abolish the program altogether from 1 July 2024. Parents can volunteer to participate in ParentsNext up until 1 July 2024, but it is not compulsory in order to receive PPS.

SSRV welcomes these changes to PPS and notes the ongoing need for rate rises across all Centrelink payments and for reform of mutual obligation requirements at large.

Transitioning from JobSeeker to Parenting Payment (Single)

The Department of Services Australia has provided guidance on the transition from JobSeeker Payment to PPS, which will take effect on 20 September 2023:

• Individuals who become eligible for PPS and are currently receiving JobSeeker Payment should be automatically transferred by Centrelink to PPS from 20 September 2023. No action is required for these individuals, and they should not have to lodge a new application. This includes those who had been previously transferred from PPS to Jobseeker Payment due to the age of their youngest child surpassing eight years old.
• Impacted individuals can expect to receive a letter in mid-August 2023 outlining this process. There are also planned online communications and social media messaging.
• Individuals receiving PPS whose youngest qualifying child turns 8 between now and 19 September 2023 will need to transfer to JobSeeker Payment until 20 September 2023. These individuals should receive an online task 28 days before their child turns 8 to facilitate the transfer process. They should then be automatically transferred to PPS from 20 September 2023.
• If an individual’s JobSeeker Payment is suspended come 20 September 2023 (for example, for failing to meet mutual obligations) they will not automatically be transferred to PPS on 20 September 2023. The reason for the suspension will need to be addressed first. If the individual is not entitled to JobSeeker Payment on 20 September 2023, they will need to lodge a new claim for PPS.

You can find more information here:

1. https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/Budget/reviews/2023-24/ExpandingEligibilityParentingPayment
2. https://www.servicesaustralia.gov.au/sites/default/files/2023-05/budget-2023-24-may-raising-kids-1.pdf
3. https://ministers.dss.gov.au/media-releases/11121

Our recommendation

If you are working with a client who is transferring from Jobseeker Payment to PPS, we recommend they keep a close eye on their Centrelink payments and MyGov account to ensure the transfer does occur automatically or to pick up any issues that do arise.

It is likely some clients will expect the transfer to occur automatically for them, but in practice, there may be an issue that they need to identify and resolve.

If a client’s Jobseeker Payment is suspended or cancelled leading up to or on 20 September 2023, we recommend they take an active role in ensuring their transfer to PPS. It is likely they will experience issues with an automatic transfer.

We encourage you to phone our worker helpline on (03) 9481 0655 and speak to one of our social security lawyers if any issues do arise that you require further information or advice on.