11 March 2014

March 20 Newstart changes- more than just a rate increase

The rate of Newstart allowance (NSA) is adjusted twice a year - on 20 March and 20 September - in line with upward movements in the consumer price index (CPI).  This time round, the various NSA rates (and some associated payments) will increase by 1.9%.  Coinciding with these changes, the amount of private income a person can have before NSA is reduced under the income test is also being increased, from $62 a fortnight to $100 a fortnight.  This will be the first increase in the "income free area" or "allowable income" since 1 July 2000 when it was increased by $2 a fortnight as part of a range of measures intended to compensate for the introduction of the goods and services tax.
While the CPI based rate increases have received some coverage (go here for the press release and here for a detailed list of the changes), the increase in the income free area hasn't had much at all.  So, herewith, a few charts showing the combined effect of the CPI rate increases and the changed income test free area!