Complexity as a barrier to work

5.28 In this section, the ALRC proposes that DHS should evaluate the effectiveness of its methods for communicating information about social security payments and entitlements to mature age persons. The income support payment system in Australia is highly targeted, both through making distinctions between payment categories—such as for carers, people with disability and those unemployed—and by means testing of payments.^[42] The object is to direct payments to those most in need and to maintain the sustainability of the system.^[43] The result is ‘the most targeted system of cash transfers in the OECD’.^[44]

5.29 A corollary of targeting is complexity. Submissions to this Inquiry said that this complexity itself is a barrier to work.^[45] Without large scale reform of the social security system, which is beyond the Terms of Reference for this Inquiry, this complexity will remain. It is therefore important to ensure that information about social security payments is as clear and accessible as possible, to assist individuals to manage this complexity.

Information provision

5.30 DHS utilises a range of methods to provide information about income support payment eligibility, conditions and the effect of work upon payments, including, for example, the DHS website,^[46] and the News for Seniors magazine published three times a year.^[47] However, the ALRC has heard that mature age persons find this information difficult to understand and navigate.

5.31 A number of submissions identified access to information about income support payments as a problem for mature age persons.^[48] While noting that this issue was not limited to mature age persons, the Acting Commonwealth Ombudsman reported that:

we commonly receive complaints in which people say they have only just learned about a payment or entitlement that would have been of assistance to them earlier. This problem … reflects the complexity of the social security system as well as the difficulty departments have in ensuring that important messages are appropriately targeted and promoted.^[49]

5.32 The increasing emphasis on providing information online was also identified as a potential problem, especially for mature age persons whose access to and familiarity with information technology may be limited.^[50]

5.33 However, even where information is available, a number of stakeholders suggested that mature age persons find this information difficult to understand.^[51] For example, the Australian Institute of Superannuation Trustees submitted that the Age Pension means test was ‘overly complex and difficult for the layperson to understand’.^[52] My Longevity stated that ‘many people need third party advice to make sense of these entitlements’.^[53]

5.34 Some stakeholders argued that information about incentives to take up paid work is not effectively communicated to mature age income support recipients.^[54] For example, COTA Australia (COTA) stated that ‘there is not a good understanding of how the Work Bonus operates … It needs to be promoted more widely’.^[55]

5.35 There may be opportunities to improve communication with persons engaged in the social security system. For example, the Australia Institute has suggested that the data-matching tool used by Centrelink to identify when income support recipients have been overpaid could in turn be used to identify those who may be receiving less than their current entitlements.^[56] This would allow targeted advice to be provided about payments for which a person may qualify. In addition, tools enabling income support recipients to calculate the effect of work upon their overall income could be further developed and given more prominence in DHS information material.^[57]

5.36 Difficulty in accessing and comprehending information about qualification for income support payments, as well as the effect of employment income upon these payments, appears to act as an impediment to mature age income support recipients’ willingness to engage in employment. The ALRC considers that the DHS should evaluate how it could communicate this information to mature age persons more effectively.