Review of Australia's Welfare System

The starting point for any reorganisation of the system should be that all income support payments are subject to the same means-testing, by reference to both income and assets (with appropriate exemptions for principal residence, capped at a level not far above median house price for that location; business assets such as agricultural land; accumulated superannuation below a certain level, eg $500,000). This principle should be encoded in legislation to avoid future deviations from it. Payments not presently means-tested at all (eg most Assistance for Isolated Children (AIC) allowances, Carer Allowance, ABSTUDY), or not assets-tested (Family Tax Benefit, Commonwealth Seniors Health Care Card) should be subject to this discipline before any reductions in the level or indexation of other payments is considered.

As the Review Team has pointed out, inadequate means-testing has an effect beyond the immediate payment: eg having assets but an income below $50,000 entitles a family to receive both FTB A and either the AIC Boarding Allowance (which appears to cover many of the same costs as FTB) or Rent Assistance.