In the May 2005 budget the federal government announced a range of proposed welfare to work measures, including the plan to shift sole parents with a youngest child aged six years or more onto the Newstart Allowance. This report shows that the disposable incomes of sole parents could be up to about $100 a week lower under the proposed new system. It also finds that effective marginal tax rates will be sharply increased under the proposed new system, over a reasonably wide range of earned income.