Income Trends for Selected Single Parent Families

Presented by ANU College of Arts & Social Sciences

Government transfer payments make a major contribution to the incomes of many single parent families, increasingly single parents are active in the workforce and frequently pay income tax.

This seminar will present joint research undertaken with Associate Professor Ben Phillips and considers the trends in social security payments and personal income tax paid by typical single parent families (cameos) in Australia. The modelling considers the period from 2005 to 2016 and includes a further projection of two years to 2018.
The analysis compares three separate policy worlds for the social security and personal income taxation system: 1) Current policy 2) Proposed policy and 3) ‘Pre-Welfare-to-Work’ policy. The ‘Pre-Welfare-to-Work’ policy (‘Pre-WTW’ policy) is the legislation that applied in 2005 and projected forward for each year out to 2018 based only on expected changes to parameters through inflation and wage changes and ignoring all policy changes beyond 2005. The Proposed policy is largely identical to the current policy except it includes the proposed changes to family payments and clean energy supplement payments detailed in 2016-17 Budget.

The modelling shows that many single parent families are considerably worse off as a direct result of policy change enacted by various governments since 2005, reflecting both payment cuts and indexation approaches. Some higher income hypothetical families with younger children are actually better off as a result of tax cuts.