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This report was published by the former Department of Families, Community Services (FaCS).
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Executive summary

Overview

The Welfare Reform Pilots (WRP) are an initiative of the Commonwealth Department of Family and Community Services (FaCS) and were funded as part of the 2000-2001 federal Budget.

FaCS conducted three pilots:

The main objectives of the pilots are:

This report provides information on the social and economic activity patterns of these three disadvantaged groups of income-support customers. The barriers they face to increasing their levels of participation in the Australian economy and society are explored, as are their goals and work aspirations.

Some highlights from the report are:

This report represents a significant achievement in the research agenda for FaCS. It provides important information that will assist in the refinement and evaluation of Welfare Reform, including the Australians Working Together measures soon to be implemented, especially those involving Personal Advisers. A later report will analyse the impact of various interventions that were trialled in the pilots with the aim of increasing levels of social and economic participation.

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Aims and objectives of the pilots

The key objectives of the pilots were to:

MAPP participants were mature workforce age people on income support. They were 50 years and over except for a small group of Partner Allowees who were aged from 46 to 49 years.

The VLTUP targeted those people on Newstart Allowance (NSA) who had been on income support for more than five years. This was a group of customers who may have had limited contact with Centrelink and had not worked substantially, if at all, for an extended period of time.

The WFP focused on two groups of workless parents with school-aged children:

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Policy context for pilots

Even before the final report of the Welfare Reform Reference Group (2000), commonly referred to as the McClure Report, there had been growing interest both overseas and in Australia in finding ways of increasing the levels of social and economic participation among working-age people receiving income support. Since the 1980s, OECD countries have grappled with the concept of an 'active society' in which participation is central to achieving better social outcomes. The Welfare Reform Pilots are one way by which detailed information on social and economic participation among the more disadvantaged income-support recipients could be gathered and analysed.

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Methodology

The key objectives of the pilots determined the need for an experimental design. Gathering information on income-support recipients' characteristics and their social and economic participation was possible through a comprehensive survey-type interview. However, the pilots also trialled various interventions aimed at increasing levels of social and economic participation. Such a trial required a randomised experimental design for evaluating the interventions. Academics from the Social Policy Evaluation, Analysis and Research centre (SPEAR) at the Australian National University assisted in the design of the project.

The first round of interviews took place in September 2000 (Wave 1), followed by second interviews in November 2000 (Wave 2), and final interviews (Wave 3) in April 2001. Approximately 10 500 participants were interviewed as part of intervention and control groups in the Wave 1 interviews. Centrelink officers conducted Waves 1 and 2 interviews for the intervention groups, while a market research company, ACNielsen, conducted the control group interviews for Waves 1, 2 and 3 as well as the final Wave 3 interviews for the intervention group.

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Characteristics of participants

Very Long-term Unemployed Pilot - There were 1520 participants interviewed in the intervention group for Phase 1 of the VLTUP. Seventy-two per cent of participants were male and 28 per cent were female. Fifty-seven per cent were under the age of 40 and nearly one-third were aged 40 to 49 years.

The vast majority (89 per cent) of VLTUP participants had been receiving income support for between five and 10 years. Just over 80 per cent were born in Australia and 5 per cent were of Aboriginal, Torres Strait Islander or South Sea Islander origin.

Mature Age Participation Pilot - The 3429 participants interviewed in the intervention group for Phase 1 of MAPP included people receiving Newstart Allowance (NSA), Mature Age Allowance (MAA), Partner Allowance (PA) or Widow Allowance (WA). Forty-three per cent of the participants were male. Almost 70 per cent of participants were aged 50 to 59, and 62 per cent were born in Australia. A very small proportion (1 per cent) of participants reported being of Aboriginal or Torres Strait Islander background.

Workless Families Pilot - 3377 participants were interviewed in the intervention group for Phase 1 of the WF pilot. Some two-thirds were female. Among the NSA participants 90 per cent were male. In contrast, the same proportion of the PPP participants were female. In sole-parent households, PPS participants were most likely to be female (84 per cent).

The vast majority (84 per cent) of WFP participants were aged 30 to 49, almost equally split between the 30-39 and 40-49 year age groups. Almost half of the WFP participants were born outside Australia and 6 per cent reported they were of Aboriginal, Torres Strait Islander or South Sea Islander origin.

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Key findings

The following is a summary of the main findings from the first wave of interviews with the pilot intervention group participants. In subsequent chapters of the report, the findings are presented in detail separately for each of the pilots. Each of these later chapters begins with a summary of findings for the respective pilot.

Health and disability

A significant number of participants in each of the pilots reported having some ongoing disability, medical condition, illness or addiction that affects their ability to find a job or to work. Just over half of VLTUP participants, one-third of WFP participants and just under one-half of MAPP participants reported some such problem. Over 90 per cent of all who reported a problem also said they had some documentary evidence to support their claims; and of these about one in five MAPP and WFP and one in three VLTUP participants indicated that they had claimed or intended to claim a Disability Support Pension.

Overall fewer pilot participants reported their health as being good, very good or excellent than is the national average. Sixty-five per cent of the WFP participants, and just under 60 per cent of the MAPP and VLTUP participants reported their health as being good, very good or excellent, compared to the national average of 80 per cent (ABS 1997).

Education and qualifications

Levels of education attainment were quite low across participants when compared to the national average. Among VLTUP participants, 69 per cent left school at year 10 or less, and most of these did not complete year 10. These findings are similar for MAPP (67 per cent) and WFP (68 per cent). In the general population, 62 per cent have at least a Year 12 education compared with around 25 per cent overall of pilot participants (ABS 2000b).

Command of English for employment purposes among people from non-English speaking countries was a problem across the three pilots and was most pronounced in the WFP. Of the 29 per cent of WFP participants born in non-English speaking countries, between one-third and one-quarter rate their English speaking, reading or writing skills as being good. Among VLTUP participants, around 9 per cent were born in non-English speaking countries and 62 per cent of these participants rated their English speaking as good, compared with 47 and 39 per cent respectively who rated their reading and writing skills as good. Around one-fifth of MAPP participants were born overseas in non-English speaking countries and 61 per cent of these believed their spoken English was good, 58 per cent believed their reading was good and 46 per cent said they had good writing skills.

Labour market attachment

Across the pilots VLTUP participants were least likely to have had a history of paid work, with only 44 per cent having mainly worked full-time since leaving full-time education, compared with 47 per cent for WFP and 70 per cent for MAPP.

Although less than half the VLTUP recipients (all NSA) had worked mainly full-time, the level for NSA recipients in the other pilots was higher at 69 per cent for MAPP NSA and 76 per cent for WFP NSA. MAPP MAA recipients had the highest level at 93 per cent having mainly worked full-time since leaving full-time education.

Generally, female participants were less likely to have mainly worked full-time since leaving full-time education, although half the PA and WA participants had done so.

Of the three pilots, more participants in the VLTU pilots (21 per cent) reported having had some paid work in the previous two months, which is slightly more than for MAPP (18 per cent). Although WFP participants were selected on the basis of having no reported earnings in the previous three months, 8 per cent in the pilot reported having had some work. Across all the pilots most of the work that was undertaken was not permanent, in that it did not attract paid sick leave.

Around 85 per cent of VLTUP and 62 per cent of WFP participants would prefer to be working now; however, in MAPP only 52 per cent of participants indicated the same and 38 per cent said they would not like to work now or in the next five years.

When those who were looking for work were asked about their chances of finding employment within the next two months, 44 per cent of VLTUP, 66 per cent of MAPP and 46 per cent of WFP participants rated their chances as poor or very poor. Age was the most frequently cited reason for participants perceiving their chances to be poor or very poor. WFP participants identified age (38 per cent) and lack of skills (37 per cent). For VLTUP participants it was age (37 per cent), ill health (33 per cent) and lack of skills (22 per cent) while 81 per cent of MAPP participants identified age, followed by lack of skills (26 per cent) and illness/health (23 per cent).

Across all pilots, job seeking activities resulted in around 30 per cent of NSA participants who were looking for work having at least one job interview in the previous two months.

Study and training

At the time of interview, 11 per cent of WFP, 8 per cent of VLTUP and 6 per cent of MAPP respondents were studying or training. Among those participants who were not studying now but would like to, around one-third for VLTUP and WFP and 39 per cent for MAPP indicated that the cost of courses was their main reason for not undertaking that study or training. The reasons given for study or training varied across pilots. For VLTUP participants, 58 per cent gave work as their main reason and a further 36 per cent gave a combination of work and personal reasons. In the WFP, 43 per cent gave mainly work and 47 per cent gave both work and personal reasons. Among MAPP respondents, 38 per cent gave work as the main reason and 31 per cent a combination of work-related and personal reasons.

Voluntary work

Most of the VLTUP participants doing voluntary work reported the main reason for doing this work was to improve their chances of getting a job, whereas this was not the case in MAPP and WFP. The MAPP participants were the most active volunteers with around one-quarter undertaking some voluntary activity in the previous two months compared with 20 per cent for WFP and 15 per cent for VLTUP. However, when asked if they were doing voluntary work to improve their chances of getting a job, 64 per cent of MAPP, 59 per cent of WFP and 39 per cent of VLTUP said that it was not for work-related reasons.

Family and caring responsibilities

While males generally reported that care of children and housework was shared equally with their partner, fewer women reported this to be the case. For those with children, low levels of formal child care use were reported (WFP 3 per cent and VLTUP 11 per cent). Informal child care was higher with 22 per cent of VLTUP and 29 per cent of WFP participants likely to have had recourse to a sibling or other relative for child care purposes.

MAPP participants' caring responsibilities were most likely to involve caring for someone with a long-term health condition or disability, or helping someone who is elderly with everyday types of activities. Eleven per cent of participants in VLTUP and WFP had similar responsibilities. Across the pilots, more females than males had a caring role.

Community involvement and social activities

The number of participants who indicated that they would like to be more involved in their community varied across the pilots. For the VLTUP, one-third said they would like more involvement and the most common reason given was to help other people (58 per cent). These findings were similar in WFP, where one-fifth of participants wanted more involvement and 61 per cent gave the same main reason for this as VLTUP participants. In MAPP, although one-quarter wanted more involvement, close to half of the participants did not want more involvement either now or in the next five years.

The most common reason for VLTUP and MAPP participants not becoming more involved was ill health/disability (18 per cent and 22 per cent respectively), while for WFP the most common reason was family responsibilities (20 per cent).

Among both VLTUP and WFP participants, 85 per cent had some social contacts with friends in the past two months. The proportion was slightly higher for MAPP at 89 per cent. There were, however, differences within pilots across the various payment types.

Membership of clubs or associations was much the same for WFP and VLTUP at 26 and 28 per cent respectively. MAPP had a membership rate of around 46 per cent.

While social activity levels appear relatively high, participants are less likely to report that they feel able to influence what happens in their local communities by such things as writing to the local newspaper, writing to their Member of Parliament or writing to the local council. Only 27 per cent of WFP participants and 33 per cent of MAPP and VLTUP participants thought they could have an influence.

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1. Introduction

Welfare reform pilots: characteristics and participation patterns of three disadvantaged groups