Reliance on income support in Australia: prevalence and persistence

Welfare dependence or reliance is widely regarded to have adverse consequences for both the community and welfare recipients, yet there have been few studies of the extent and nature of welfare reliance. Indeed, the concept of welfare reliance does not seem to be well defined. In this paper, we attempt to clarify the meaning of the concept and derive reliance measures consistent with this concept. These measures are applied to describe the extent and nature of reliance on income support payments in Australia of persons aged 15-64 years, using Australian Bureau of Statistics income survey data and Australian government administrative data for income support payments. Although the reliance measures available are constrained by the data, a number of insights into reliance on income support in Australia can be obtained. Receipt of income support is characterised by a large number of individuals who are reliant for relatively short periods of time, and a significant number of individuals who become reliant on a long-term, perhaps even permanent basis: one sixth of all recipients aged 15-64 years are continuously on income support for in excess of 5½ years. Over the course of a year, approximately one third of the Australian population aged 15-64 years is at some stage reliant on income support payments, of whom half are in receipt of income support payments for the entire year. Significant growth in the extent of reliance on income support over the last two decades is evident