The gap between pensions and allowances is increasing - due to the different indexation arrangements for pensions and allowances, the gap between the single pension and Newstart Allowance payments rose from $55 per week in September 2008 to $133 per week today.  On current trends, by 2040 the single Newstart rate will be just half that of the pension. This submission looks at the inadequacy of allowance payments compared with pension payments, as well as living standards, work incentives, employment services and future reform. Recommendations for the 2013 Budget and for future reform are made.