How prevalent is poverty and financial stress in Australian children and families? What has been the impact of COVID-19? How much would it cost to address poverty and ensure all children grow up with the same opportunities?

To help answer these questions, the Brotherhood of St. Laurence and Social Ventures Australia commissioned the Centre for Social Research and Methods at the Australian National University to undertake research which models:

  • Australian trends in poverty, child poverty and financial stress for families relying on income support
  • The impact of the COVID-19 pandemic and resulting income support changes on poverty and child poverty rates
  • The optimal level of income support required to reduce poverty and financial stress for families and children in the most cost-effective way


The Australian social security system spends around $120 billion dollars in cash transfers to Australian households each year. This money provides a safety net for around 5 million Australian’s most of whom have little or no other regular income source due to age, incapacitation, caring responsibilities or unemployment. Payments to these persons do vary substantially as do their financial requirements. This paper considers the latest trends in financial stress and poverty through recent decades, but also through the COVID-19 period, to better understand the emerging trends and the current state of financial stress and poverty for different types of social security recipients. It contains a particular focus on children and families. The authors find financial stress has declined through recent decades across the whole population. However, those receiving working age social security payments such as the disability support pension, Carer Payment, Parenting Payment and JobSeeker have been left behind. Their financial stress and poverty levels have worsened through Australia’s long economic boom of the last 30 years. The current planned rate of income support will leave 789,000 children in Australia living in poverty (more than 1 in 6 children). Using the relationship between financial stress and income, the authors estimate where additional funding for social security would best be spent and what impact such spending could have on financial stress and poverty in Australia. The report finds that increasing overall social security spending by up to 20 per cent yields strong benefits in terms of reducing poverty and financial stress when targeted towards working age payments with high rates of poverty and financial stress. These include JobSeeker Payment, Parenting Payment Single, Disability Support Pension and Carer Payment.

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