6 August 2004 - Publication of DWP research report: ‘Financial support for 16 to 19 year olds: A review of the literature and evidence on the Australian Youth Allowance’
Research published today by the Department for Work and Pensions presents findings from a review of the literature and evidence on the Australian Youth Allowance. The research was commissioned as part of the cross-government review of financial support for 16 to 19 year olds in the UK. The report describes the design, implementation and impacts of the Youth Allowance in Australia, with a view to informing future decisions on the provision of financial support for young people in the UK.
The main findings are as follows:
- The Australian Youth Allowance was introduced in July 1998 as a single, unitary source of financial support for eligible full-time students aged between 16 to 24 years and unemployed people aged under 21. The Youth Allowance is a conditional and means tested benefit. To be eligible young people must satisfy an ‘activity test’ to show that they are participating in education, training, and/or actively seeking work. There is also a parental means test that applies to young people who are classed as ‘dependent’, and in the case of most under 18 year olds Youth Allowance is paid to the parent or carer.
- The key objective of the Youth Allowance was to encourage participation in further and higher education by providing a unified income support system for all low income full-time students up to the age of 25 years. It was also intended that the Youth Allowance would simplify financial support for young people.
- Between 1997 and 2001 there was an increase in the proportion of 16 to 24 year old Australians in full-time education from 37.5 to 39.7 per cent. Various evaluations of the Youth Allowance have reported that it is difficult to distil its impact from the effects of other changes and policies in Australia aimed towards encouraging school retention.
- The Youth Allowance has greatly simplified the benefit system for young people in Australia, by replacing a number of different individual benefits with a single source of financial support.
However, problems have been experienced with the Youth Allowance since its introduction:
- The delivery of the Youth Allowance to young people not in education, employment or training (NEET) has been criticised for a lack of flexibility, and for not encouraging activities that would increase the capacity of young people to get work, return to education or develop work-related skills.
- Disadvantaged groups such as homeless young people and young carers had sometimes experienced difficulties in meeting the activity requirements of the Youth Allowance, when housing problems or other issues in their life prevented them from participating in education or employment. This had often resulted in a benefit sanction, which in turn was linked to higher levels of benefit debt amongst these groups.
- The way the Youth Allowance interacted with other benefits payable to families in Australia was complex and some perverse incentives for parents not to work or for young people not to engage in education, employment or training were observed.
Notes for editors
- The research was carried out by Professor Dan Finn at the University of Portsmouth and Natalie Branosky at the Centre for Economic and Social Inclusion on behalf of the Department for Work and Pensions. The findings are based on an extensive review of academic, policy and professional literature, and discussions with experts and public and voluntary sector organisations in Australia.
- ‘Financial support for 16 to 19 year olds: A review of the literature and evidence on the Australian Youth Allowance’ (research report series No.215) is published on 6 August 2004. A summary and copy of the report is available on the DWP website: http//www.dwp.gov.uk/asd/asd5.
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