Welfare in Australia

In its broadest sense, welfare refers to the wellbeing of people. Attributes linked to positive wellbeing include being secure, happy, healthy and safe.

Individual circumstances, attitudes and behaviours can all affect a person's wellbeing, as can broader factors, such as access to education, employment and secure housing.

Many people do not need support, or their need for support may vary as their circumstances and life stage change. If support is needed, it can come from a variety of sources – families, friends and communities, or through financial support or formal services. Services may be provided by government and non-government organisations across a range of areas.

Major welfare service types in Australia's welfare, by main government responsibility

Chart explaining major welfare service types. Aged care, which is the responsibility of the Australian Government, includes information and assessment services, home care and support services, residential care services, and flexible care services. Homelessness services, which are the responsibility of the state and territory governments, includes specialist homelessness services. Housing, which is the responsibility of the state and territory governments, includes social housing. Services for people with disability includes advocacy, information and alternative forms of communication, accommodation support, community support services, community access services, respite care, other support services, and employment services. These are all the responsibility of state and territory governments, except for employment services, which is the responsibility of the Australian Government. Youth justice, which is the responsibility of state and territory governments, includes community-based youth justice supervision, detention-based youth justice supervision, and youth justice group conferencing. Child protection and family support, which is the responsibility of state and territory governments, includes family support services, child protection, out-of-home care, and family, domestic and sexual violence services.

Almost $160 billion spent on welfare

The Australian Government and state and territory governments spent an estimated $157 billion on welfare in 2015-16 (cash payments and welfare services only), up from $117 billion in 2006-07. This was an average annual growth rate of 3.4%. Welfare spending also now accounts for a larger proportion of gross domestic product than before: 9.5% in 2015-16 compared with 8.6% in 2006-07.

Of the $157 billion spent on welfare:

  • 67% ($105 billion) was cash payments for specific populations (excluding unemployment benefits)
  • 27% ($42 billion) was for welfare services
  • 6.3% ($10 billion) was cash payments for unemployment benefits.

Government welfare expenditure, constant prices, 2006–07 to 2015–16

Column graph showing government welfare expenditure by year for cash payments for specific populations, welfare services, and unemployment benefits. All have a trending increase over time. In 2015-16, there was around $110 billion spent on cash payments for specific populations, around $40 billion spent on welfare services, and around $10 billion spent on unemployment benefits.

Tax expenditure or concessions by the Australian Government for welfare amounted to $47 billion in 2015-16 (on top of the $157 billion in spending). Most of this (75%) was for concessions for superannuation to help people fund their retirement. Around $4 billion (9%) was for concessions for families and children.

Find out more: Chapter 1.4 ‘Welfare expenditure’ in Australia’s welfare 2017.

Australia top of OECD in means testing rates

In Australia, income support payments are subject to means testing. This process determines eligibility for benefits, and helps to ensure that resources focus on supporting people with relatively lower incomes and fewer assets.

Means testing plays a more prominent role in Australia than in other countries. In fact, we are the highest means-testing country in the Organisation for Economic Co-operation and Development (OECD). Around 80% of our spending on cash benefits (for example, age pensions and unemployment benefits) is determined by means testing.

Government spending on income and means-test benefits as a proportion of public social spending on cash benefits, by selected OECD countries, 2012 or latest year available

Bar chart showing the proportional government spending on benefits for various countries. In order from highest to lowest spending, they are: Australia, Iceland, Canada, Israel, New Zealand, the United States, the United Kingdom, Poland, Luxembourg, Hungary, Sweden, and the Czech Republic. Australia spent nearly 80%25 of their public social spending, while the Czech Republic spent less than 3%25.

Australia targets social benefits spending to those in most need. In 2011, around 42% of social spending on cash benefits went to the lowest (or most disadvantaged) quintile of households; only 3.8% went to the highest 20% of households in Australia.

Find out more: Chapter 1.3 ‘Understanding welfare’ in Australia’s welfare 2017.

A growing welfare workforce

In 2015, an estimated 478,000 people were employed in the welfare workforce – an increase of 84% since 2005.

The welfare workforce can be grouped into three categories: child care services and preschool education, residential care services, and other social assistance services. All three service areas grew between 2005 and 2015.

Number of employed people in the welfare workforce per 100,000 population, by type of community service industry, 2005 to 2015

Line graph showing the number of employed people in the welfare workforce over time. There is a trending increase in employment rates all industries. In 2015, most people (around 750 per 100,000 population) were employed in childcare services and preschool education. Around 650 per 100,000 population were employed in residential care services, and around 550 per 100,000 population were employed in other social assistance services.

Two occupation groups made up more than 60% of the welfare workforce in 2015:

  • 'early childhood education and care' workers – 170,300 workers
  • 'aged and disabled' carers – 123,200 workers.

Find out more: Chapter 1.5 ‘Welfare workforce’ in Australia’s welfare 2017.

Some Australians face persistent disadvantage

About 4.4% (1 in 23) of Australians are estimated to face deep and persistent disadvantage. Some groups in the community face rates of disadvantage that are much higher than the national average. For example, almost 1 in 4 people living in public housing experience deep and persistent disadvantage, as do 1 in 6 who depend on income support, and 1 in 8 who are unemployed.

An estimated 17% of Australian children aged under 15 were living in poverty in 2014 – up from 15% a decade earlier.

Estimates of deep and persistent disadvantage in selected population groups, Australians aged 15 and over, using the Social Exclusion Monitor, 2001 to 2010
Group Facing deep and persistent disadvantage (%)
Living in public housing 23.6
Dependent on income support 15.3
Unemployed 11.5
Lone parents 11.3
With a long-term health condition or disability 11.2
Indigenous Australians 10.8
Highest educational attainment Year 11 or below 9.3
All Australians 4.4

Find out more: Chapter 1.6 ‘Persistent disadvantage in Australia: extent, complexity and some key implications’ in Australia’s welfare 2017.