January changes for single parents

Soon it will be 1 January 2013, with its attendant changes to some of the arrangements for single parents.  I've done quite a few posts on this over the last year but I thought it was worth updating the figures using the rates, etc, that will actually apply on that date.

The changes I'll be focusing on are:

• the removal of the "grandfathering" provisions that have so far prevented single parents who have been on parenting payment (PPS) since before 1 July 2006 from being subject to the so-called age-8 transition; and
• the relaxation of the Newstart allowance income test for single parents with the principal care of at least one child aged under 16.

Handily, both of these can be looked at in the context of the age-8 transition.

Good news for some single parents...

As 1 January 2013 approaches, the changes in the eligibility conditions for parenting payment continue to receive attention.  These changes will result in the loss of entitlement to parenting payment for existing recipients whose youngest child is aged 8 or more.  However, there's another change affecting single/sole parents that has so far had very minimal coverage - and this time it's actually a gain.

For so-called "principal carer" single parents in receipt of Newstart allowance, the income test is being relaxed.  The rate at which payment is reduced by income will change from the current 50 (or 60) cents in the dollar to 40 cents in the dollar.  For Newstart recipients whose rate is currently reduced due to their income, these changes will lead to an increase in payment.  It will also allow some sole parents who currently earn too much to get Newstart allowance to receive a part-rate.

Here's a chart that shows the gain (expressed in yearly terms) the income test change produces.