No apology necessary, Jenny Macklin

It’s rare that we hear politicians admit that they were wrong – all the more surprising when they are in fact right. But so it was Tuesday morning when former Labor minister Jenny Macklin conceded that the Gillard government had ‘got it wrong‘ on single parent income support entitlements.

Macklin’s concession relates to the abolition of the grandfathering arrangements for Parenting Payment Single (PPS) in January 2013. This involved 63,113 parents losing their eligibility for PPS – 98% of whom were moved onto Newstart.

PPS recipients are entitled to a pension maximum rate and income test – both more generous than those for allowances. This reflects the diminished capacity for full-time work faced by the principal carer of young children. PPS is not activity tested until the youngest child is six years of age at which time recipients must be actively seeking work or engaged in education and training.

Once their youngest child turns eight, single parents are no longer eligible for PPS and must apply for another payment – for the most part Newstart, reflecting their increased capacity to work once their youngest child is in school. Newstart is an allowance with a lower maximum rate and consequently tighter income test compared to PPS.

Prior to the Howard government’s Welfare to Work Reforms of 2006, eligible single parents could remain on PPS until their youngest child turned 16. The policy settings changed in July 2006 but did not apply to those who were already receiving PPS and it is these parents who were said to have been grandfathered.

Those moved off PPS represent about 15% of those originally grandfathered in 2006 – the vast majority were able to move off PPS over the six and a half years that followed the reforms.

According to the then Department of Education, Employment and Workplace Relations, the changes were designed ‘to improve equity in income support and to encourage workforce participation‘. Imagine, for example, two single parents, both with a child of six years of age, who are similar in every respect with the exception that one had their claim approved by Centrelink prior to 30 June 2006 while the other made a claim shortly after 1 July.

The first of these parents would face immediate activity tests and would have just two years under the pension policy settings; the second would not be activity tested until a year later and would receive a higher payment and softer income testing for the next six and a half years.

There may be cogent arguments why the parents of school children should be given preferential treatment within the allowance system as is currently the case. If single parents can only secure part-time work due to their caring commitments, it is not unreasonable that this be reflected in their allowance policy settings. This is not however a reason for them to stay on what is effectively a pension for upwards of 16 years.

To apologise for repealing a policy that allowed parents with the same work capacity to be treated differently for no other reason than the date at which they made their claim seems strange.

No apology necessary.

Matthew Taylor is a Research Fellow at The Centre for Independent Studies.